Joint Committee on Transport, Tourism and Sport debate -
Wednesday, 9 Nov 2016

Tourism and Competitiveness Strategy: Discussion

Chairman

I will now turn to the matter on the agenda today. I apologise to the witnesses for the delay. We had some housekeeping matters to address before going into public session.

Members are reminded of a long-standing parliamentary practice to the effect that Members should not comment on, criticise or make charges against a person outside the House, or any official by name in such a way as to make him or her identifiable.

I welcome Mr. Niall Gibbons from Tourism Ireland; Mr. Shaun Quinn and Mr. Paul Keeley from Fáilte Ireland; Mr. Tim Fenn and Mr. Joe Dolan from the Irish Hotels Federation; and Mr. Paul Gallagher from the Irish Tourist Industry Confederation. I thank them for coming before the committee today to discuss issues relating to a strategy for developing tourism and competitiveness. The opening statements have been circulated to members.

I draw the attention of the witnesses to the fact that, by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the Chairman to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. I remind our guests their presentations should be of no more than five minutes' duration if possible. I invite Mr. Niall Gibbons from Tourism Ireland to make his opening statement.

Mr. Niall Gibbons

I thank the committee for this opportunity to address it today. I am the CEO of Tourism Ireland which, as members know, is the organisation responsible for marketing the island of Ireland overseas. It was established as one of the six areas of co-operation under the framework of the Belfast Agreement of Good Friday 1998. The principal objectives of the company are to increase tourism to the island of Ireland and to support Northern Ireland to realise its tourism potential.

Tourism Ireland operates in 23 markets overseas and, in delivering its marketing campaigns, the organisation works closely with Fáilte Ireland and Tourism Northern Ireland to ensure our promotional themes overseas align with the development priorities of the industry at home. It is an integrated collaborative approach. I acknowledge the presence of my colleagues from Fáilte Ireland, the Irish Hotels Federation and Irish Tourist Industry Confederation. I propose to give a brief overview on overseas tourism to Ireland and speak about some of the factors that have arisen as a result of the recent Brexit referendum.

The island of Ireland has seen five consecutive years of growth in overseas tourism, and 2015 was a record-breaking year when we welcomed 9.5 million overseas visitors to the island of Ireland, delivering revenue of almost €5 billion. Growth has continued in 2016. The latest CSO figures for the Republic of Ireland indicate we have had the best ever January to September period, with figures growing by 12% when compared with the first nine months of 2015. Visitor numbers to Northern Ireland grew by 8% in the first quarter of 2016, the first period for which official figures are available, and industry feedback points to a record summer season. We have seen exceptional results from North America, Britain, and mainland Europe this year, with important markets such as Italy, Spain, France and Benelux all recording really strong growth. Britain is the largest single market for tourism to Ireland, delivering 42% of total overseas visitors and 24% of total revenue. Other priority markets in terms of visitor numbers and revenue are North America, Germany and France.

In marketing the island of Ireland overseas, a number of important factors are at work. Policy interventions by the Government, such as the zero rating of the air travel tax and the reduction in VAT on tourism services from 13.5% to 9%, have undoubtedly facilitated the introduction of new air routes, enhanced competitiveness and helped to facilitate the kind of growth we see in overseas tourism today. Continued investment by the Irish Government and Northern Ireland Executive in tourism experiences such as the Wild Atlantic Way, Ireland’s Ancient East, Dublin, Titanic Belfast and the National Trust's Giant’s Causeway visitor centre helps to capture the imagination of overseas visitors from throughout the world and keep Ireland in the international spotlight.

Tourism Ireland has also invested in developing a significant digital footprint in recent years and, increasingly, leverages its strength in digital and social media in all markets. This has yielded considerable marketing efficiencies and created opportunities with new audiences worldwide. Our global campaigns reach an audience of up to 700 million prospective visitors through traditional and digital marketing.

Interest in visiting the island of Ireland has remained high among potential visitors in our top source markets. Perceptions of Northern Ireland as a place to visit for holidays have improved over time. While interest in Ireland is currently strong, this cannot be taken for granted in a highly competitive global marketplace in which more than 200 destinations compete for business.

The recent Brexit referendum has undoubtedly posed challenges in the short to medium term and Tourism Ireland has been actively monitoring the implications for the tourism industry on the island of Ireland. In terms of the British market, the main factors that arise relate to consumer confidence and competitiveness. General economic uncertainty impacts on consumer confidence which, in turn, has consequences on demand for travel. According to Oxford Economics, the number of British people travelling abroad to all destinations is forecast to decline by 2.4% in 2017. This will undoubtedly have consequences for the island of Ireland.

Since the referendum, sterling has depreciated by approximately 18% against the euro, which has made the eurozone as a whole more uncompetitive. Given our dependence on Britain as a source market, Ireland is likely to be more impacted than other European countries. Also, in the context of the depreciation of sterling against the dollar, the UK has become a very competitive destination for potential visitors from the United States in 2017. This makes our industry’s value for money message more important than ever in our promotions overseas.

The common travel area between Ireland and the UK is a key priority for tourism. To give just one example, Northern Ireland has seen strong growth in overseas tourism in the recent years, with 950 international tour operators now programming Northern Ireland as part of the island of Ireland. A total of 75% of visitors from North America to Northern Ireland and 68% of visitors from mainland Europe to Northern Ireland arrive via the Republic of Ireland. The future of the common travel area is, therefore, vital for our business.

The British-Irish visa scheme and the short-stay visa waiver programme have provided a significant boost to our marketing efforts in China, India and the United Arab Emirates. Tourism Ireland and VisitBritain signed a memorandum of understanding in April 2014 with the aim of working more closely together to promote the island of Ireland and Great Britain as destinations to be visited as part of a single holiday. In the past two years, the two organisations have worked together to highlight the British-Irish visa scheme in China and India. China is a key example of a country from which the island of Ireland has seen significant growth in visitor numbers since the advent of the British-Irish visa scheme. This year, we expect to welcome approximately 50,000 Chinese visitors in 2016, thereby reaching the growth target we set for 2017. We welcome the announcement last month that the short-stay visa waiver programme is to be extended for a further five years to October 2021. The ongoing status of the British-Irish visa scheme will require clarification.

Looking ahead to 2017, Oxford Economics has revised its tourism growth forecasts for the island of Ireland downwards for the fourth time since the Brexit referendum. It has identified Ireland and Northern Ireland as the destinations most exposed to and impacted by Brexit. This is a matter that Tourism Ireland, Fáilte Ireland and our industry partners will continue to keep under review.

While Britain will continue to be an important market, Tourism Ireland has in recent years shifted its focus towards mainland Europe and North America as our most important sources of holiday visitors and revenue. This diversification approach will continue as a strategic priority in our corporate plan for the period from 2017 to 2019. Looking at growing our share of visitors from further afield, a review of new and developing markets is under way, led by Tourism Ireland and working closely with the Departments of Transport, Tourism and Sport and Foreign Affairs and Trade, Fáilte Ireland and representatives of the tourism industry. The strategy will focus on marketing and on the training and upskilling that is required for the tourism industry to meet the needs of visitors from these markets.

I returned this morning from World Travel Market in London, the world’s largest travel fair, at which Tourism Ireland and 70 tourism businesses from across the island promoted. World Travel Market attracts more than 50,000 international travel professionals, with 180 destinations all vying for business. The environment there points to a very competitive marketplace. I assure the joint committee that Tourism Ireland and the Irish tourism industry is out there fighting for business for 2017, which will be a challenging year for all of us. I thank members for the opportunity to present today. I will be pleased to discuss these matters in greater detail presently.

Chairman

I invite Mr. Shaun Quinn from Fáilte Ireland to make his opening presentation.

Mr. Shaun Quinn

I thank the Chairman and members of the joint committee for inviting Fáilte Ireland to discuss the development of tourism. I am accompanied by my colleague, Mr. Paul Keeley, the director of business development at Fáilte Ireland, who will join me in engaging in the committee's deliberations this afternoon.

Members will be aware that 2016 is something of a record year for Irish tourism. By the end of the year, we will have recorded close to 9 million tourism visitors during 2016, which is an increase of 11% on last year and of almost 50% on the trough of 2010. All the key source markets are performing well with many recording double digit rates of growth, as Mr. Gibbons outlined. Our visitors appear to be very happy with their holiday experiences and over the past five years, our value for money ratings have been climbing to new highs. Employment in tourism is also increasing, arguably at a faster rate compared with many other sectors of the economy. This is, in large part, the result of the Government’s decision to maintain the applicable VAT rate at 9%. At a local level, many of our most remote communities have recorded their best tourism season in several years. Initiatives such as the Wild Atlantic Way have no doubt significantly bolstered their fortunes and those of many other regions.

Although welcome, success such as this can breed complacency at a time when the horizon for tourism is far from cloudless and calm. The headline statistics are eye-catching and can easily imply a sector on a growth trajectory and without challenge. The recent performance of tourism has been greatly fuelled by a benign trading environment, as Mr. Gibbons noted, which is characterised by favourable exchange rates, increased air access and adequate industry capacity to accommodate growth. This environment is now changing and becoming less certain. Whether Irish tourism can aspire to greater heights or even consolidate its current position will be very much down to strategies of its own making and, in particular, to how it responds to emerging issues at home and overseas.

At home, we are already experiencing difficulties in accommodating visitors in our more densely populated and most visited urban centres. The hotel accommodation base in these areas is clocking up high occupancy rates. Of particular concern is availability in Dublin, which is essentially at capacity for most of the year. With two of every three visitors expressing a desire to spend at least part of their holiday in Dublin and with supply constraints and value dipping, there are implications for how the Ireland destination may in time come to be perceived in terms of competitiveness. Our analysis, conducted by Fitzpatrick Associates, indicates a respectable pipeline of planned new hotel projects for Dublin. Unfortunately, much of this is scheduled for completion in two or three seasons from now. The way in which the tourism sector and local authorities collectively grapple with this acute shortage over the medium term will be one critical factor in determining how tourism across the country as opposed to only in Dublin will perform in the longer term. Regrettably, this challenge could be lessened by the potentially potent implications of Brexit.

Irish tourism's high dependency on a single market - Britain - has been well documented and was described very well by Mr. Gibbons. Prior to the economic downturn, every second visitor to this country travelled from Britain. In the intervening years, this reliance has been reduced to two in five visitors, which remains uncomfortably high in the context of Brexit.

Within Britain, Ireland is very much perceived as an extension of sorts of its domestic holiday market, competing with Scotland, the Lake District and Cornwall. The weakening of sterling against the euro dictates that the Republic is now also a much more expensive extension of this market in the minds of potential British visitors. We are seeing as much from our own recent snapshot of visitor attitudes, which indicates a decline in value for money perceptions among British visitors since the UK voted to leave to the European Union in the summer. The implications are, therefore, obvious. Within Ireland, Dublin is likely to be affected most given its relatively high exposure to the outbound city break market from Britain.

While Britain may pull out of Europe, Europe will not pull out of Ireland. Continental European markets offer the best prospects for a more sustainable growth model for the tourism sector over the medium term. Many businesses are making solid progress in that area. With the introduction of euro coinage in 2002, fewer than one quarter of Ireland’s visitors came from mainland Europe. This share has increased risen to 36%, equivalent to almost 3 million visitors. This represents a doubling of tourist traffic over the intervening period. Critically, these markets also tend to favour regions outside of Dublin which, unlike the capital, are by no means operating at full capacity for most of the season. These are also relatively high-yielding markets, which significantly outperform the British market in overall revenue terms.

Markets such as Germany and France are enormous travel markets with tremendous potential for Ireland, yet we still only have a modest share of them. Therein lies the challenge facing the tourism sector. The British market is obviously too big to ignore and every effort must be made to ensure that Ireland gets its unfair share, so to speak. Far-flung emerging markets in Asia-Pacific region also offer some opportunities to Ireland but not necessarily any time soon, given the time required to develop new markets. It follows, therefore, that a very deliberate and targeted strategy to rebalance the order books in favour of the relatively more lucrative continental European markets must be a major plank in the sector's response to current challenges. This will mean not only making more marketing investment or doing more of the same, but will also require Fáilte Ireland to increase investment in a number of areas.

They include, for example, building sales and marketing capability within businesses ready and willing to diversify and gain a foothold in mainland European markets; enhancing the international appeal and multi-lingual interpretation of visitor experiences and expanding trade distribution channels open to selling Ireland to their clients. It also means leveraging the potential of brands such as the Wild Atlantic Way which we know are already resonating well in Germany and France.

The recovery of the tourism industry following the economic downturn has been solid and steady. Most recently, growth rates have been well in excess of what would be labelled sustainable. However, much of the growth has been facilitated by external factors which can change quickly. The weakening of sterling is a case in point. As we head into more uncertain and potentially turbulent times, we must guard against complacency, so often prevalent in boom times, creeping into the sector. Growing pains within the accommodation sector at home and the prospect of either a hard or soft Brexit for tourism are wake-up calls to be heeded and acted on decisively.

Chairman

I thank Mr. Quinn. I invite Mr. Fenn of the Irish Hotels Federation to make his opening statement.

Mr. Tim Fenn

I thank the Chairman for inviting the Irish Hotels Federation to address the Joint Committee on Transport, Tourism and Sport. The federation is the national representative organisation of the hotel and guesthouse sector in Ireland. As a key stakeholder in tourism, we work with our industry partners to ensure there are the right conditions for tourism to grow and prosper, thereby contributing to recovery and job creation in the economy.

Having experienced a very difficult downturn, the tourism industry has seen significant recovery in recent years. It has been underpinned by a number of important Government policy initiatives such as the 9% tourism VAT rate which has made us more competitive when marketing Ireland internationally. As members will see from the graphic included in the presentation, Ireland’s VAT rate is in line with those in other European countries with which we compete. Currently, 14 countries have a VAT rate of 9% plus or minus 1%, while 21 countries have a VAT rate at or below 10%. Only five countries have a VAT rate above 13%. Other important measures introduced in recent years include the zero rate air travel tax and support for tourism initiatives such as the Wild Atlantic Way, Ireland’s Ancient East and Dublin - A Breath of Fresh Air which are proving to be an enormous success.

While strong tourism growth in recent years bodes well for the industry, continued growth cannot be taken for granted. This is an island destination and we face some unique challenges in terms of access and competitiveness. It is vital, therefore, that we have a tourism strategy in place to delivers sustainable, long-term growth and build on the significant economic benefits already delivered in recent years in every town and county. We are experiencing substantial additional demand throughout the country for skilled employees. There are tremendous opportunities to pursue a career in tourism, particularly for young people thinking about their future career choices. We are working closely with the Government, State agencies and education providers to highlight the career options available and develop sustainable training models for the industry. For example, we are developing new culinary apprenticeship and traineeship programmes that offer candidates opportunities for progression and professional development.

Our key policy objectives for the continued development of tourism include growing Ireland’s reputation and brand abroad, retaining perceived value for money satisfaction, targeting higher spending visitors, continuously improving tourism product quality and increasing sustainable tourism accommodation capacity. However, we face a number of significant challenges that need to be addressed, including cost competitiveness issues within the economy, the significant risks associated with Brexit and current insufficient levels of funding for tourism marketing and product development.

On the challenges posed by Brexit, the industry is very dependent on the economic environment of our major source markets and remains vulnerable to external economic shocks. As witnessed by the United Kingdom’s decision to leave the European Union, there can be no room for complacency. Brexit poses a particular challenge, given Ireland’s heavy reliance on holidaymakers and business travellers from the United Kingdom which accounts for over 40% of overseas visitors. Sterling has dropped by over 20% against the euro compared to this time last year and this has resulted in a worrying reduction in the spending power of visitors from Great Britain and Northern Ireland. While it is still too early to predict the full impact Brexit will have on the sector, many tourism businesses are already beginning to see a negative effect. The vast majority of our members are concerned about the implications of Brexit for their businesses. An added concern is the potential implications Brexit could have for the free movement of people between the United Kingdom and Ireland. Any disruption to the current arrangements would be detrimental to the tourism industry. It is essential that we avoid a hard border with Northern Ireland and that we maintain the common travel area and open airspace with the United Kingdom.

On investment in tourism marketing and product development, the international tourism industry in which we operate is exceptionally competitive and Ireland fights hard for every visitor and tourism euro earned. Tourism demand is constantly evolving and as conditions change, we must be ready to respond as an industry. This requires continuous investment in tourism marketing and product development to ensure our tourism offering keeps pace with global competition. Tourism has proved to be an excellent investment for the country, with every euro spent in destination marketing by the State resulting in a €34 visitor spend in the country. A pressing marketing challenge is the need to attract more visitors to the regions. Reduced marketing budgets have had a negative effect on regional tourism. The tourism industry continues to experience a three-tier recovery, with Dublin performing strongly, followed by other large urban areas and tourism hot spots. However, many rural tourism businesses continue to lag behind. This is further compounded by the disproportionate negative impact seasonality has on regional tourism. It is time to increase funding for the tourism agencies. Current low levels of investment cannot be sustained without putting our tourism brand at risk and limiting the capacity of the tourism industry to achieve sustainable growth. A substantial increase in marketing support is required to reduce our over-reliance on the UK market and safeguard future growth in tourism, particularly in the key European and North American markets. Further progress is needed before the industry reaches its full potential as a major engine for growth and job creation. Given the right environment, we believe the industry can continue to grow and create a further 40,000 jobs by 2021, in addition to the 50,000 already created since 2011. However, this requires continued investment and a renewed commitment to ensure tourism will remain at the heart of Ireland’s economic policy.

I thank the committee for giving us the opportunity to address it. We look forward to addressing matters members may wish to raise.

Chairman

I thank Mr. Fenn. I invite Mr. Gallagher from the Irish Tourist Industry Confederation to make his opening statement.

Mr. Paul Gallagher

I thank the Chairman and members of the committee for giving the Irish Tourist Industry Confederation, ITIC, the opportunity to discuss opportunities and challenges for tourism in Ireland. The ITIC is the representative group for tourism business interests in the country. Our members include airlines, airports, hotels, attractions and tour operators, as well as the two State tourism agencies, Fáilte Ireland and Tourism Ireland.

Without dwelling too long on the past, 2016 will mark the third consecutive year of record visitor numbers from abroad - almost 9 million, with record revenues generated of circa €8 billion and, critically, employment numbers in the industry now in excess of 230,000. This means that over 45,000 new jobs were created in the tourism sector since 2011, 72% of which were created outside Dublin. No other industry can match that performance, either in absolute numbers or the regional dispersal of jobs. I take the opportunity to acknowledge the support the tourism sector has received from the Government, particularly the suspension of the airport departure tax and the introduction of the 9% VAT rate in 2011. These were key factors in the recovery of tourism from the collapse in the years 2008 through 2011. The VAT rate, in particular, reduced costs and allowed the sector to become much more competitive, the benefits of which are clear to see in new jobs growth and the Exchequer returns. There has been a level of debate about the 9% VAT rate, but it is important to highlight that it puts Ireland on a level playing field with its European neighbours. As 17 of the 19 eurozone countries have a VAT rate of 10% or less, the rate in Ireland is of the right size and appropriate.

We have been active in driving more hotel capacity in Dublin and we are strong advocates for a new brand identity for the Shannon corridor to maximise tourism in that area. The Irish Tourist Industry Confederation, ITIC, has worked very well and closely with Fáilte Ireland and Tourism Ireland and that collaborative approach has worked well for Ireland.

As an industry, however, we remain disappointed by the State’s lack of investment in tourism with regard to destination marketing funds and product investment funds. Destination marketing budgets for the promotion of Ireland to overseas markets are down 40% since 2008, while the current five-year capital plan - which is valued at €27 billion - only allocates €106 million to tourism investment. These two areas need to be addressed as a matter of urgency as otherwise, Irish tourism will not be able to realise its potential. ITIC is also of the view that the State’s ten year strategy, People, Place and Policy - Growing Tourism to 2025 is unambitious and needs to be overhauled. Only two years into that plan, its targets have nearly been met already so clearly the plan was far too conservative.

Tourism is a cyclical business and frequently subject to external factors over which it has no control such as political unrest, recession or slow growth in key source markets, terrorism or unfavourable exchange rate movements. The most pressing external factor at the moment which presents a major challenge to Irish tourism is Brexit. While the tourism sector is performing strongly, analysis carried out by the tourism industry shows that the implications of Brexit could be far-reaching for Irish tourism. Brexit, as the most pressing external factor, presents big and immediate challenges. The most obvious challenge from the UK vote to leave the EU has been the sharp weakening of sterling against the euro and the dollar. Consequently, Ireland’s competitiveness has been severely hurt. We must remember that the UK remains Ireland’s largest source market with a 40% volume share. Never before has the industry or the State needed to remain competitive and lean to protect its market share and to sustain growth. There is also a strong case to be made for a Brexit fund for Irish tourism to ensure that market diversification can be achieved and that the British market is sustained. Sterling has weakened by nearly 20% since 23 June.

In the medium to longer term it is critical that the needs of Irish tourism are recognised in any new EU-UK deal. ITIC has identified four key areas to protect tourism in Ireland that need to be addressed within EU-UK negotiations, namely, the common travel area, aviation access, regulatory regimes and cross-Border co-operation. We argue that the common travel area must be maintained and should any border controls be imposed to allow the UK to manage migration, these should be on the British mainland and not on the island of Ireland. A hard border that limits the movement of people would be unequivocally damaging to Irish tourism. Likewise, the preservation of the current aviation regulatory regime of open market access for airlines between Ireland and the UK is critical for tourism to prosper. With regard to the regulatory environment that is negotiated as part of any new EU-UK deal in the wake of Brexit, the Government must be conscious of not disadvantaging tourism businesses in the Republic of Ireland to the benefit of those in Northern Ireland. Cross-Border co-operation is vital to be maintained particularly in light of all-island agencies such as Tourism Ireland. Tourism has been well served by an all-island approach to its marketing and promotion and there needs to be a strong commitment to this going forward in any new deal, with appropriate resources allocated.

Tourism has shown its resilience. It has recovered strongly and has delivered jobs right across the State. There is much more growth to realise. Given a fair wind and continued support from Government it can continue to grow. As an indigenous sector, tourism is Ireland’s biggest and there is simply no other Irish industry with greater further potential. Tourism industry assets can never be offshored and there will never be equal alternatives to our unique attractions, from the friendly welcome of the people to the brilliant product, and of course the fabulous beauty of our land and seascapes. Once Ireland remains competitive, pursues the right policies and investment strategies, and counters Brexit as best it can, Irish tourism will continue to prosper and grow.

Chairman

I thank Mr. Gallagher. I will now call on members to put their questions. I ask that members be as concise as possible in their questions to the witnesses. Members will be called in the following order; Deputies Fitzpatrick, Troy and Munster and Senator Ó Céidigh. After that we will come back to the remaining members.

Deputy Peter Fitzpatrick

I welcome the witnesses to the committee today and thank them for their presentations. My first question is to Mr. Niall Gibbons of Tourism Ireland. Will Mr. Gibbons provide a breakdown for the committee of the expenditure by Tourism Ireland between Northern Ireland and the South? I would argue that we rely too much on the British market. Given the decision of the UK to possibly leave the EU, it is now vital that Ireland expands its market base. What are Tourism Ireland's plans to replace the current dependence upon the UK market with other markets, such as North America, Germany and France? Perhaps Mr. Gibbons will also elaborate more on Tourism Ireland's participation at the World Travel Market in London last week. With regard to the British market, Mr. Gibbons stated the main factors are consumer confidence and competitiveness. I do not agree with this assertion. I firmly believe that people visit our shores for more reasons than just price competitiveness. We need to market the reasons why people visit our shores. We need to concentrate on our strengths and not focus on the perceived weaknesses. The current situation around currency fluctuations is, in my opinion, only a short-term issue and will bottom out. I would always urge Tourism Ireland to concentrate on Ireland's strengths when they market us abroad.

I also have a question for Mr. Shaun Quinn of Fáilte Ireland. He has said that we rely too much on the UK market. We should have been planning to extend our market base even before the UK decision to possibly leave the EU. Will Mr. Quinn outline the specific plans Fáilte Ireland has in place to expand the market base for overseas visitors? I completely agree with him that Ireland must never become complacent despite the record number of visitors for 2015 to 2016. I have spoken to people directly involved in the tourism sectors in my constituency in Louth and the last number of years have been outstandingly good. Areas such as Carlingford and the Boyne site have seen numbers increase substantially. Apart from Brexit, what does Fáilte Ireland see as the major challenge facing the tourism industry over the coming years? As well as challenges, what does Fáilte Ireland see as the major opportunities for the sector?

My other questions are directed at Mr. Tim Fenn from the Irish Hotels Federation. He said that one of the major challenges facing the industry is the current insignificant level of funding for the tourism markets and product development. Perhaps Mr. Fenn will elaborate more on where exactly this lack of funding is taking place. A common complaint is the lack of available hotel beds, particularly in Dublin. Can the Irish Hotels Federation quantify exactly the number of additional beds required and where they are required? Another big complaint I have heard concerns the raising of hotel prices, especially in Dublin, during busy periods.

I also wish to ask a question of Mr. Paul Gallagher from the Irish Tourist Industry Confederation. He said that the Government's ten-year strategy, People, Place and Policy - Growing Tourism to 2025, is unambitious and needs to be overhauled. Can he outline what, in his opinion, would be a more ambitious and realistic plan and what are the main elements he would see as requiring an overhaul? I agree with him that the Government must be conscious of not disadvantaging tourism business in Ireland to the benefit of tourism business in Northern Ireland. Will Mr. Gallagher outline what are the areas of most concern in this regard?

Deputy Robert Troy

I welcome our guests here today. It is worth noting that tourism is a critical sector in the Irish economy which contributes significantly to the GDP and in the number of people who are employed in the sector. I acknowledge the positive policy decisions that have been taken by the previous Government in the reduction of air travel tax to zero and the reduction of the VAT rate. These measures have contributed positively to this sector over the last number of years. That said, a recurring theme across all of today's presentations to the committee is the challenge posed by Brexit. I am delighted that each one of the industry representatives has acknowledged that challenge. When I raised this with the Minister for Transport, Tourism and Sport, he did not see Brexit as being a challenge to the tourism industry, despite the fact that 42% of visitors to Ireland come from Britain and that 24% of our tourism sector revenue is generated from that market.

The presentation by the Irish Tourist Industry Confederation outlined how much of a reduction there has been in tourism funding over the years and that the reduction did not stop this year. In the last budget, we have once again experienced a further cut to the funding for marketing and promotion of tourism. Compare this with the UK; only a couple of months ago it put together a £40 million fund for the Discover England campaign.

We are competing with it. It is also considering how it can improve its visa system and apprenticeship programmes. It is our nearest neighbour and, make no mistake about it, given the favourable exchange rates between the United Kingdom and the United States, it will try to attract those we have been attracting heretofore. In that regard, does Tourism Ireland consider we are adequately funded to conduct a serious marketing campaign in the United Kingdom and the United States, as well as to diversify in other destinations? In its contribution Fáilte Ireland stated far-flung emerging markets offered some opportunities but not necessarily any time soon as they required time to develop. Why have we not been developing these new markets before now? Why are we waiting for Brexit to occur before looking to develop new markets? When 42% of the industry is focused on one country, anyone would know that we should be looking wider afield.

Tourism Ireland has stated the ongoing status of the British-Irish visa scheme requires clarification. Exactly what clarification is required? I would have thought Tourism Ireland and Fáilte Ireland would be well aware of how the scheme is administered and the criteria that apply to it.

Reference was made to capacity in large urban areas. It is a serious issue, but we are being told today that it will not be dealt with for at least two to three seasons. What will be done in the meantime? Is there a plan to move some of those coming to Dublin into the regions? I represent the midlands region which includes Longford and Westmeath. Hoteliers, bed and breakfast accommodation providers and restaurant proprietors tell us there is an upturn - that is not doubted - but it is nothing compared to that in urban settings. What is being done to ensure people will move further?

I understand Fáilte Ireland's responsibility is to market within Ireland and provide funding for critical pieces of infrastructure and the improvement of tourism attractions, while Tourism Ireland's responsibility is to market internationally. One of the delegates spoke about the quality of the experience of visitors to the country. Promoting Ireland's Lakelands brand is a key commitment in the programme for Government and I understand a tender has been accepted. Will the counties included in the Ireland's Ancient East initiative benefit from the promotion of the new Ireland's Lakelands brand? When will the brand be ready? Is Fáilte Ireland happy with the level of funding it has received to support applications for large-scale projects? I understand the process is ongoing and that a decision will emanate shortly.

Hotel and restaurant proprietors tell us that there is a critical shortage of chefs and front of house staff. This matter used to be dealt with by Bord Fáilte and the Council for Education, Recruitment and Training, CERT. There seems to be an abdication of responsibility by Fáilte Ireland in ensuring there is a sufficient number of qualified staff to work in the industry. What are its plans to ensure programmes are in place to support those who want to work in the sector?

In terms of hotels, we are at full capacity in Dublin which is to be welcomed, but this is contributing to other problems. Again, are we pricing ourselves out of the market? Will we become uncompetitive? There is full occupancy, particularly at certain times of the year. Hoteliers who admittedly have had a number of lean years are coming back and using this as an opportunity to compensate for the losses incurred during the lean times, but we cannot return to a situation where Dublin is known as a high-cost place to visit. How is the housing crisis feeding into the issue? Various councils in Dublin are using hotel space to house homeless persons. Those who are homeless have to be looked after, but is it having a knock-on effect?

Deputy Imelda Munster

I thank the delegates for their presentations. I have a couple of questions.

One of the delegates referred to a three-tier recovery, with Dublin faring best. The focus on promoting tourism in the regions does not seem to be sufficient. We have the Wild Atlantic Way and Ireland's Ancient East, but the benefits of these initiatives are not trickling down to places outside the main urban settings. Certain areas along the east coast are not getting sufficient tourists, given what they have to offer. They do not seem to be have the same priority in marketing. They are all lumped into the one package, but, thus far, there appears to have been little focus on certain areas.

Particularly in the light of Brexit, although I would have imagined work would have been initiated prior to it, what plans are in place to include the west coast in the North as part of the Wild Atlantic Way and its east coast in Ireland's Ancient East and at what stage are they? What particular areas in the North have been incorporated into Ireland's Ancient East and the Wild Atlantic Way?

Reference was made, in the light of Brexit, to the need for a targeted strategy for continental Europe, although I presume that would have been the case. What programmes and marketing strategies are in place? Aside from marketing, what else has happened so far?

We are all aware that hotel beds in Dublin are in short supply, particularly during the summer months in the height of the tourist season. Everyone knows that the prices charged for the few beds that were available were extortionate. What measures is the industry taking to ensure Dublin will remain affordable and, more importantly, competitive? The overcharging for beds seems to be a real bone of contention. What are the occupancy figures for 2016? Can we get a breakdown?

In the light of Brexit, what other plans are in place to promote tourism?

It will be more or less affected depending on whether it is a hard or soft Brexit. Mr. Gallagher's opening statement referred to the State's "People, Place and Policy" document as unambitious. What is his own vision? The Irish Hotel Federation said there were 230,000 people employed in the tourism industry. Is it possible to get a breakdown on those figures? Are they part-time or temporary positions? They are impressive figures but it would be useful to see if they are seasonal jobs or whatever.

As it is my local area, I am going to raise it. We talk about regional tourism and focus. The Boyneside trail is a huge programme with great potential for tourism along the east coast from Mornington. They hope to stretch it eventually to the Border where it is met. At the minute, Mornington to Drogheda is envisaged. An application has been made to Fáilte Ireland for capital funding and, to the best of my knowledge, approval has not yet been forthcoming. If inroads are to be made into regional tourism, that is exactly where one starts. With projects like that, one can guarantee that one will bring tourists and revenue in. There are a couple of other issues locally of which Fáilte Ireland is aware. While I contacted it several months ago, I did not get any response with regard to St. Laurence's Gate in Drogheda. The gate is of huge historical significance and is already a tourist attraction. However, it is in need of refurbishment to open it to the public. One has to keep chasing things like this. It comes back to my initial question about focusing. If Fáilte Ireland is focusing, why is progress so slow in these areas, sites and projects of huge tourism potential? Perhaps, Fáilte Ireland has the answers. It could be funding. Given the set up for the Wild Atlantic Way and the Ancient East, one would imagine that Fáilte Ireland would be more on top of it at this stage. On funding for projects that are proven tourist attractions, what is the hold up in funding, promoting and resourcing?

Senator Frank Feighan

I will try to be brief. Most of the questions have been asked by other speakers. I congratulate the witnesses. It is not too often that people come into these committee rooms with a good story to tell. The industry came from a difficult situation where it faced huge challenges five or six years ago with the downturn in the economy. The 9% VAT rate has certainly been a help, but most of the witnesses are self-employed and have gone out there to put huge funding into their own businesses. It is a very good news story but we cannot be complacent. That is why we are here today with Fáilte Ireland and the other witnesses to work together to build a brand and add more value.

There are two or three different issues on which I want to ask questions. Nobody has talked about Airbnb. People are saying that it is taking over and has affected the homeless. It has taken a lot of apartments out of the system, but I am certain that if it was not available - in Dublin especially - we would have lost a lot of the tourists coming in. It is building up that capacity which is vitally needed. It is an issue on which I ask the witnesses to comment.

The Office of Public Works, OPW, has huge swathes of property around the country. It is a typical public body in that it sometimes fails to think outside the box. I see it in my own town where €6 million or €7 million has been put into the abbey yet the OPW closed the bloody thing down three or four weeks ago without telling anyone on the ground. These are things that should not happen. I remember a few years ago trying to get permission to take photographs for weddings. Are the witnesses getting co-operation from these State-owned facilities and from State employees? If they are not, I would like to put it out from the committee that they should do a lot more. While a lot has changed, they sometimes lack the capacity to think outside the box the way the industry has done.

I see it myself that it is a problem to get the tourists out of Dublin and down the country. It is the same to Belfast and is a problem all over the world. If they go to London, it is hard to get them out to the regions. Mr. Joe Dolan is here from Carrick-on-Shannon. What has happened there has been incredible. It is a small town of 4,000 people which is boxing way above its weight. There is capacity in apartments and hotels; the whole lot. It is a brand and is our regional town. I was chair of Lough Key Forest Park Action Group before I came into politics many years ago. We received co-operation from the local authority and Coillte because the latter was not allowed to draw down from the European Regional Development Fund. It was my idea to bring the local authority on board and it was a joint approach. We got control of the park and set up a company called Moylurg Rockingham Limited. It has been very successful with 50 or 60 people employed and the local authority earned €200,000 from it last year. Are there other projects like that? This was seen in south Longford with Center Parcs coming on board. Are there more projects we can do, where semi-States do not have the expertise or cannot draw down the funding or think outside the box? Can we look at those again with local authorities?

I live in a town beside Lough Key Forest Park. We had two hotels but now have no hotel. We missed the building of the hotels where there were property speculators building houses and hotels. Most of them did not make money and the banks have taken them over and sold them off cheaply. It has probably been a huge problem for hoteliers because it is a non-level playing field where NAMA or the banks are paying for these hotels. We are in a town now with no hotel. It is the same in Ballaghaderreen, Castlerea and other small towns. If we want to get tourists into those areas, we will need hotels. However, nobody will build a hotel now because one can buy one ten miles up the road. Is there anything the Government could do by way of a tax incentive or a block grant? There could be only 15 or 20 of these towns in the country but if they do not get a flagship hotel, they will not survive. Do Mr. Gibbons or Mr. Dolan have any ideas as to what they would do to address that if they were in government?

Deputy Kevin O'Keeffe

I am delighted to see an all-Ireland approach. All of the points have been raised in the submissions and everybody is singing from the same hymn sheet on the 9% VAT rate, the aviation regulation framework and tourism promotion such as the Titanic Experience and Ireland's Ancient East. The only flaw I see across the way is that I am looking at six men. It is ironic in this day of equal opportunities in employment that the females seem to have stepped aside.

The issue I ask about is Brexit about which every economic sector in Ireland is worried. We are all up in the air at the moment. Do the witnesses have plans in place whether the UK goes the hard or soft route? We do not know when it will kick in because of the court case issues in Britain. However, the public has made its call and there will be some kind of Brexit. That has been even more affirmed because of the Trump victory in America. One gentleman made the point that a Brexit fund should have been put in place in the recent budget for the tourism sector. However, as Deputy Troy said, there was actually a cut in funding from the Government to the tourism sector.

Another good point was made about Airbnb, about which there is fierce talk and the conflict in terms of apartments which used to be rented. I am not in favour of abolishing it. It is very wanted. I experience it myself as a Deputy from down the country who finds it a nightmare to get a hotel room in Dublin. When will the industry sort out capacity and, more importantly, pricing in the hotel sector in the capital itself? The industry is aware that the IRFU is touting big time for the Rugby World Cup to be hosted North and South. Is the industry confident that it will have the bed capacity available in that period to carry the major influx we would expect then?

In the last number of years, there was a major drive by local authorities to operate their own tourism initiatives. Are the witnesses happy with the way they are going? Are they doing a good enough job? I sat on Cork County Council and we had our SPC. It is all about funding at the end of the day. Are the witnesses happy that tourism through the local authority mechanism is working correctly?

Senator John O'Mahony

I join colleagues in thanking the witnesses for attending and giving their presentations. To all of them I say "Well done" whether in the State agencies, industry bodies or businesses in playing their part in such a huge increase in numbers in the last four years. Funding is an issue, as has been pointed out. Funding was outside everyone's control four and five years ago because the money simply was not there. Supports had to be given in a different way at that time which is where the reduction in VAT and travel tax came in. Tourism can be supported by more than just direct funding. It can be supported by some of the measures which were taken at that time. The witnesses have all referred to competitiveness and value for money, which was a major attraction for people. That is changing and has changed over the last couple of years in particular.

Can the witnesses enlarge on their previous answers to the following question? Is there now a greater opportunity for a greater spread of tourists throughout the country? Are there any figures? Mr. Quinn said that people want to come to Dublin, which is fair enough, but if the large urban areas are at bursting point, is there something we can do? I note the Wild Atlantic Way and targeted marketing. While it was a slow boil, it was wonderful. The facilities in rural areas now are way ahead of what they were three or four years ago with the greenways and everything else. Is there an opportunity for more emphasis on the value for money that can be obtained in rural areas or along the west coast in general? Are there figures to show the number of tourists coming directly to Ireland who do not come through Dublin? Dublin has been the big story, but I am interested to hear about Knock and other airports. Knock has grown over the last number of years and there are also Shannon and Cork Airports. What is the potential there to bring people into the places that can benefit the north west, Carrick-on-Shannon and other areas? Is there potential there? Can it be addressed? When we think of going abroad to particular countries, we think of going to the capital. Surely, however, it is the job of everybody involved in tourism to educate people that there is better value for money in other parts of the country.

I will not go over the questions that have already been asked on Brexit, but is there any comment on what happened yesterday in America regarding the stock market and the weakness of the dollar? Is that going to be another obstacle for 2017? Is there a danger that the growth we have seen from North America could be affected as well as the British tourism market?

I ask all the witnesses for suggestions as to what can be done by the Government. Funding has been mentioned. I also ask the witnesses what they can do. The State agencies will implement Government policy but what will the Irish Hotel Federation and the industry in general do that will ensure the continued growth in tourist numbers?

Senator Ned O'Sullivan

I apologise for arriving late. I welcome the witnesses and commend everyone involved in one of the success stories of the economy. As a Kerryman, I note the huge importance of tourism to my county. I am sure the witnesses are well aware of the recent launch of the Kerry county tourism strategy plan, which is fantastic. I was at the launch in St. John's in Listowel. The document is a template for other local authorities nationally. Our CEO, Moira Murrell, and her team have involved all the players, including hoteliers, restaurateurs and those involved in tourism transport. Everyone has pulled together, which is what it is all about in tourism. It is about a co-operative effort. Like every other county, Kerry will look for its fair share of grant aid, but Kerry people in tourism are proven to be prepared to muck in themselves. They put their money, time and effort up. The launch was a wonderful occasion and I would like to see it replicated nationally.

I have a bit of a bugbear on an issue that this may not be the forum to address. However, I am not a member of the agriculture committee. A delegation from Horse Racing Ireland recently attended the committee. I am a fan of horse racing which is huge for the tourism economy. I would like to see Fáilte Ireland interface to a greater extent with Horse Racing Ireland on the best way to maximise our racing industry from a tourism point of view. Horse Racing Ireland has a particular focus on its own work, but there is a wider picture out there in and around racing, whether it is the major festivals at Punchestown, Galway and Listowel, or the classic meetings. One thing has bothered me. Listowel has a long-established racing festival. It is over 150 years old and the seven-day meeting draws huge money and visitors into Kerry during the shoulder season. At the tail-end of that week last year, Horse Racing Ireland put on a flagship flat programme in Dublin at Fairyhouse and Leopardstown with prize money of over €1 million on each day. The whole attendance there would not equal the attendance on the big day at Listowel, which is the Wednesday on which the Kerry national is run. While I am in the wrong forum, I plead with tourism interests to get hold of Horse Racing Ireland to see if it can get the overall picture. It is not all about horses, but about the economy also. Perhaps, that is something that could be taken up.

Another issue that I am sure has been mentioned is Dublin's hotel capacity and pricing. We are in danger of destroying tourism in the city. There is a Rod Stewart concert coming up on Friday week, which I know because my wife is a fan. I am lucky in that regard because I have an apartment in Dublin.

However, I know lots of people from the country who must stay as far away as Portlaoise as they cannot get accommodation closer to Dublin. There is something wrong with such a situation. The availability of Airbnb accommodation hides the problem. If this matter develops into a planning situation down the line then it will give the hoteliers a bigger stronghold.

The impact of Brexit on tourism has been mentioned. From our experience in Kerry the British tourist, in particular, is a good spending tourist who loves Ireland, its fishing and camping. I hope there is a Brexit strategy and I ask the witnesses to address the matter.

Chairman

I wish to note Mr. Gallagher's comments on the investment in destination marketing and production. The figure is serious. There might have been more investment had results not been so good over the past number of years. The topic stood out in terms of the presentations made here.

What ideas do the witnesses have for winter tourism? I come from County Kerry so I know that in parts of the county, excluding Killarney, tourism ceases for the months of October to April. There is great capacity to improve tourism during these months. What can we do about tourism at such times? Can we do more from an ethics point of view? Can we do more to market Ireland internationally as a destination for winter tourism? Kerry has spectacular scenery in the wintertime. Standing on Slea Head looking at the Atlantic Ocean in January is more invigorating and exciting than in July. The view is spectacular and amazing. Also, in winter one has quiet pubs. One can see more of the real Ireland in the off-season than in peak season. Can we do more to create employment all year around and sustainable industries in the off-peak season?

Rural pubs form an important part of the tourism product. Are the witnesses concerned about them? A lot of quiet Irish pubs seem to be struggling, particularly the ones that do not provide food and simply sell cheese and onion crisps and Pink Snack bars. Such pubs do not benefit from the 9% rate of VAT. I would like to hear the views of the witnesses on the matter.

Does Tourism Ireland plan to invite President-elect Trump to Ireland? A high-profile visit would boost the US market. I share the concerns that have been expressed about the potential volatility of the US dollar. I call on Mr. Gibbons to commence.

Mr. Niall Gibbons

A few issues overlap and I shall try to address all of them.

I have just come back from the World Travel Market and 70 companies travelled from here in preparation for the 2017 season. As many as 180 countries competed against us. In attendance were 50,000 tourism professionals and 3,000 international media so it was a large showcase. One of the most interesting presentations we received was from the United Nations World Tourism Organization. It pointed out that in the first nine months of this year the number of tourist trips around the world had reached 1 billion in nine months, which is up on last year. Interestingly, the number of trips to Europe has increased by 2%. Central European countries like France, Turkey and Belgium have been decimated by the tragic events that have happened over the past 12 months. The big winners in Europe this year have been Spain, Portugal and Ireland. All of this has led to a situation, over the past number of years, where we have talked about market diversification. We embarked on market diversification as part of our strategy for 2014-16. That meant spending a smaller amount of money but a bigger proportion of a smaller spend in North America and mainland Europe. It brought us to a situation where at the end of last year, the tourist spend from Britain last year was up 9% to under €1.4 billion to the island of Ireland; the USA's spend last year was up 27% to just short of €1.3 billion; and mainland Europe was up 20% to €1.7 billion. In the past number of years we have identified a series of countries where we have the capacity to grow real holiday revenue. I refer to countries like Germany, France, Spain, Italy, Benelux and the Nordic countries. The initiative has paid dividends for us. The spend by European tourism now to the island of Ireland is well in excess of the tourism spend by British visitors. This year it is possible that the spend by people from North America may pip Britain at the post at the end of the year but that remains to be confirmed. For the past three years we have undertaken the diversification strategy and we will continue it for the next number of years.

Approximately 30% of our funding comes from the Northern Ireland Executive and directly from Stormont and 70% comes from the Irish Government. We have a board comprised of six members from each jurisdiction who approve our business plan. We are finalising the business plan at the moment.

We shall face a number of challenges in the next three years. We do not have full clarity on our funding because the Stormont Administration works on a different fiscal year. We have the practicalities of the fallout from Brexit. This is because we get a surplus amount of sterling from Northern Ireland - we do not need to use it all in the UK - and because of the collapse of sterling versus the dollar, we already are down €1 million in our marketing spend next year because of sterling currency movements since Brexit.

In respect of the Brexit plan, I want to distinguish between a marketing plan and what has happened arising from Brexit. There are economic situations that have arisen from Brexit over which we have no control. Such economic uncertainty gives rise to consumer uncertainty and casts doubt on whether people will travel next year. Oxford Economics advises us on these matters. It has told us that the British this year will take about 65 million trips abroad and it is likely to be 2.5% less next year. Also, the island of Ireland is more exposed because we depend more on the British market than other European markets. It is entirely possible that we may see a reduction in the number of British tourists visiting here next year. As sterling has moved by between 18% and 20%, it makes the eurozone as a whole more competitive and, thus, poses pricing challenges for 2017.

There are other factors. I do not know how the Brexit ball will bounce. I do not know what direction factors such as the common travel area and visas will take until after Article 50 is triggered and negotiations take place. These factors will not influence whether people visit here. The real factors are how easily people can get here. Every week during the summer months people can avail of 237,000 airline seats provided by eight airlines to fly to Ireland and there are 50,000 car spaces on the ferries. We will continue to promote how easily people can travel here. We will also continue to promote shoulder season festivals and events.

Members have asked what will happen post-Brexit and I shall give an example. The actor, Richard E. Grant, visited here in the autumn because Tourism Ireland is using him in a campaign to highlight Ireland to 5.5 million culturally curious customers who listen to Smooth Radio. Recently the Lonely Planet travel organisation announced that the Skellig Ring is its destination of choice for 2017. That aspect was well on show at the World Travel Market over the past three days. We have targeted the 1.9 million readers of The Daily Telegraph over the past number of weekends as they are right in our target market. This week, Dublin features on the front page of Time Out magazine, which is timely coverage as it coincided with the World Travel Market.

In terms of online coverage, Tourism Ireland is the third largest tourism agency in the world on Facebook with 3.6 million fans and we are second largest in the world on Twitter and YouTube. This allows us to pump out messages all through the year, both nationally and regionally, on what is on and what there is to see and do. Such work continues. An awful lot of good and positive activity is taking place and I do not want it to be overshadowed by the Brexit debate. We will have to see how the debate pans out. For the consumers choosing where to holiday next year, it still will be easy to get here. We must make sure that we offer them good value for money and we must continue to invest in the marketplace.

We are concerned about our share of voice, which has been in decline in all of our main markets over the past four years due to lower levels of investment. Ireland's ranking as a destination choice has been in decline for the past five years because of reduced investment in the marketplace. That is a concern for us but we will continue to make the case for additional funding.

A clarification was sought on the visa scheme. Two visa schemes are in operation that were launched in the past number of years. First, the UK short-stay visa waiver programme allows visitors from approximately 15 Asian countries who enter the UK and clear immigration to travel to Ireland with no additional visa requirement. The initiative has been extended to 2021, which is terrific news for us in marketing Ireland abroad.

Second, the British-Irish visa scheme has operated in China and India for the past two years. The scheme is being review by the Departments of Foreign Affairs and Trade and Justice and Equality and we are liaising with them. The sooner we can get clarity on the future of the scheme the better because it has given us a great platform, along with our colleagues in the UK, in markets like China and India. Let us bear in mind that we compete with the Schengen zone that is comprised of over 25 countries and provides visa and passport-free travel arrangements between all of those countries. Ireland and the UK are out on their own competing against mainland Europe in the largest outbound travel market in the world. As many as 130 million Chinese people will travel abroad this year with perhaps only 50,000 of them travelling to Ireland.

On the point as to why we were not doing this work before, I can confirm we have been doing it for the past 15 years.

The bottom line is that Ireland does not have a brand presence in all of these markets. We work very closely with agencies such as IDA Ireland, Enterprise Ireland and Bord Bia and Departments such as the Departments of Foreign Affairs and Trade and Justice and Equality. We work as a member of Team Ireland. We are in competition with other large-scale destinations such as the United States. Brand USA was launched in recent years and ten year visas are now offered in China. Japan also offers ten year visas in China, whereas we tend to offer single entry visas for a period of between three months and two years. One has to look at the competition. We need a marketing strategy to ensure our enterprises are "China ready" in terms of the language, its food and customs. There are people who are doing really good work in that regard, including in the Guinness Storehouse and Trinity College Dublin. We must be serious about our level of investment in these countries against that of our competitors.

I will touch on the regions, but I acknowledge our colleagues in Fáilte Ireland will have much to say about them also. There has been a great deal more activity in the tourism sector in the regions in recent years. Initiatives such as the Wild Atlantic Way and Ireland's Ancient East have given us critical mass in the international marketplace, but it is very difficult to cut through with small-scale messages. One needs projects of international size and scale. New festivals and events such as the Bram Stoker Festival and the New Year's Eve celebrations, anything that is off peak, have been really good for us. As we are very keen to collaborate with airlines that drive access to the regions, we have conducted many campaigns with Kerry, Shannon, Knock and Waterford airports which provide access from point to point regions in Great Britain.

We have seen a significant level of activity in European markets, in which we are using a large proportion of our reduced budget. We have completed market reviews of all our main markets in Europe, in conjunction with our colleagues in Fáilte Ireland, Tourism Northern Ireland and the industry. We have completed market reviews in Germany, France, Spain, Italy, the Benelux countries, as well as the Nordic countries, in which markets we have seen spectacular growth. Ten years ago visitor numbers from Germany were about 300,000; this year they well exceed 600,000, although it has to be said our market share is less than 1%. There is great potential to drive regional holiday business, as these visitors stay in hotels and will hire cars. Last year 3 million Europeans visited the island of Ireland, an increase of 16%.

Airbnb has provided a safety valve in Dublin where there has been congestion, with price and availability being the biggest risks in satisfying future demand. It is a small component of the overall tourism mix.

We have liaised with the Office of Public Works and Fáilte Ireland. I am sure my colleagues will comment further on the OPW, but we are seeking to exploit what we call secondary sites, places such as Skellig Michael which can only take 180 people a day. However, there are great opportunities at other OPW sites around the country. We recently had a meeting with it to discuss the matter.

On the events of last night, the economy will be the most significant determinant in terms of how many people will travel to Ireland next year. We will keep that matter under review. We have a central marketing partnership group. In respect of events that affect the industry from an economic perspective, we work very closely with the industry and can adjust and adapt marketing programmes. We have learned a great deal from what has happened in the past ten years and are adaptable and flexible on the marketing side.

We are still confident that we can achieve growth next year. The level growth forecast in 2017 by tourism economists has been halved in the past seven months, arising from the economic turmoil. We will, however, continue to keep that matter under review and will still have a very strong marketing programme. We have a sales force. About 14 companies are travelling to the west coast of the United States later this week, while a sales mission will leave for Australia and New Zealand. There is really good engagement by the industry in pushing all of the good reasons people should come to Ireland. A positive is that we are likely to see at least a 10% increase next year in air capacity from North America, with expansion from both the United States and Canada. Etihad Airways has announced a twice daily year round service to Dublin and we are also likely to see a small increase in air capacity from mainland Europe. While there are uncertainties, there are also many positives which we will continue to accentuate throughout 2017.

Mr. Shaun Quinn

I will follow up on Mr. Gibbons' comments. There were a few comments and questions about Brexit, on which the issue is the degree to which we are exposed to the British market. The diversification strategy in play for some years was about reducing the level of that exposure and, if anything, we were ahead of the game, collectively, in the industry in that we were not caught off the hook. This year we will receive 3.5 million visitors from Britain, but we will also receive 3 million from elsewhere in the European Union. Therefore, much progress has been made at a time when, collectively, budgets are down 50% on what they were. Our job is to look at the product and what we have to offer in working with businesses on the ground. Our contribution to the strategy has been the experience brands, what we call the Wild Atlantic Way, Ireland's Ancient East and the Dublin Brand. I hope we will also have a lakelands brand. When one enters a market in which one is not well known, promoting Wicklow or Westport on its own will not do it as the county jersey does not mean anything internationally. One needs projects of scale that resonate with the market. That is what has happened in the case of the successful Wild Atlantic Way and, to a lesser extent, Ireland's Ancient East. The Wild Atlantic Way initiative was introduced two or three years before Ireland's Ancient East. I fully understand Deputy Imelda Munster's point that some local areas are not benefiting, particularly in the east and the south, but the story in the west because of the Wild Atlantic Way is completely different. We are at the early embryonic stage, but what we are doing is on the right track. The Wild Atlantic Way runs along the west coast; it is a Gaelic Ireland proposition. That is why it does not extend along the south or to the North. Tourism Northern Ireland is in the process of completing a strategy for Northern Ireland and we will be talking to see if there are areas in which we can co-operate in the marketplace in a meaningful way. My colleague, Mr. Keeley, will deal with some of the points raised.

There are mixed views on Airbnb, but it is meeting a need in a growing segment of the marketplace. We must recognise that certain consumers want to avail of that product, which is fine.

We have signed a strategic partnership agreement with the OPW with which we have a really great relationship. We are making headway at a number of sites, principally in the east and south, but we hope to make progress across the board. I assure Senator Frank Feighan that we are receiving great co-operation in that regard.

Deputy Kevin O'Keeffe mentioned tourism marketing by local authorities. If it is local, that is fine, but, as I said, the county jersey means nothing internationally. It is the experience brands in Ireland that resonate. I do not think we are seeing wasteful investment in that regard.

Deputy Robert Troy made a number of points, as did Deputy Imelda Munster, about the capital grants scheme. We have a track record of being efficient in processing capital grant applications. We run a competitive grants process. I cannot comment, however, on any individual grant application. If there is a delay in processing, it is purely due to the sheer numbers of applications submitted. We received a much higher volume that we had anticipated, but we intend to make the first allocation under the scheme before Christmas.

Let me confirm clearly that there has been no abdication of responsibility on our part in the training of chefs. We invest about €4 million a year across ten institutes of technology, fuelling upwards of 500 chefs per annum. In addition, we are working with the Irish Hotels Federation and others in developing a new apprenticeship scheme through SOLAS. That is the new model through which we believe we will be able to increase turnover. I am aware of the shortages in some parts of the tourism industry, most notably the restaurant sector, in which apparently there seems to be an unusually high turnover of staff.

The expert skills group which concluded an analysis on this clearly showed a turnover issue in some sectors. From my point of view, as a public servant with responsibility for investing taxpayers' money, rather than investing more money in training for people to leave we must improve retention rates. There is no abdication, in fact we are fully committed to it. Perhaps Mr. Keeley will speak about the lakelands and winter tourism seasonality.

Mr. Paul Keeley

I will begin by linking the issues of regional spread, season extension and diversifying the risk from the British marketplace. A pretty holistic response is taken to this and Mr. Quinn has already alluded to it. The first thing we had to try to do was to better inform the international consumer and the international buyer about different flavours of Ireland. The Wild Atlantic Way, Ireland's Ancient East and Dublin give three very distinct flavours of Ireland and they have given buyers and consumers a much better sense of what they are being asked to opt into. We work with Tourism Ireland's teams on marketing these regional propositions on international markets, most specifically in Europe but also in Great Britain because notwithstanding Brexit it is too big a marketplace to just walk away from. Even in the fourth quarter of this year, part of Fáilte Ireland's industry budget will be spent through the Tourism Ireland team in the Great Britain marketplace to make sure we stay vigilant.

Approximately 65% of hotel bed nights sold are in the domestic marketplace. A big challenge we have is working with industry throughout the country to get it geared up to sell internationally. For small businesses in particular, the complexity and international distribution challenges can be a bit overwhelming. We work with businesses on the type of consumer the business is best suited to, the markets they are best focused on and the distribution channels which serve them best with regard to getting access to those markets. A big stream of work for us is working with them on their ability to gear up and deal professionally with international buyers to ensure we are gearing up more and more businesses to get active internationally.

We have a team that works with these businesses. If we work with businesses on the ground to develop new products and get people out of the traditional hubs, then we must give the international consumer and the international buyer a reason to go to them. Through the Wild Atlantic Way, Ireland's Ancient East and Dublin we are working on the ground with small businesses to develop new products and new experiences. We work with them to get these onto the international shop shelf, for want of a better term. We work through the market teams and international distribution channels to secure distribution for new products. This includes products such as the Wild Atlantic Way. This year, we have worked with six groups of industry to develop a seasonal offering that will take us into the winter shoulder and earlier in the spring, but there is little point in bringing out the businesses to work on developing these products if we cannot get them carried by international buyers. We also take on this work.

It is a full circle of developing new products and new experiences, getting the products to the marketplace, getting more businesses active internationally, building better relationships with international distributors and, last but not least, trying to dial up the advertising tap so if the product is available we begin to create consumer awareness and draw it through. If we can do this, it is how we will start to generate regional spread. I can cite any amount of anecdotes about small businesses which perhaps were struggling to get access to the international marketplace but, by virtue of being able to plug into the three brands, have been able to give the international buyer a reason to pull into their site and attraction. We have seen this in terms of businesses which were part-time and have gone full-time and businesses with two or three people which have added an additional two or three people. This piece is working. It is about getting regional and seasonal spread and diversifying across a number of key markets.

A specific question was asked about the lakelands and we are quite excited about this. It has the potential to be the fourth brand. As Deputy Troy correctly picked up, we have appointed a consortium to work with us on the project and we have a good mix of skills. We do not believe the answer is just marketing. An agency will work with us on brand and product development and an economic consultant will also work with us on this. Almost inevitably, we will arrive at a product deficit and we will need to make the case for investment. Having a sound economic argument to back it up will be important. We also have RedC on board as part of the consortium to work with us to ensure whatever we do is researched thoroughly with the international consumer and international buyer to ensure whatever we bring forward we can have the confidence it has been robustly researched and will stand up in the marketplace. Specifically, we are looking at the area that lies between Ireland's Ancient East and the Wild Atlantic Way. We are working from 30 km east of the Wild Atlantic Way to 10 km east of the Shannon. All the counties in Ireland's Ancient East and to the east of the Shannon are being included in the current scope of work.

The starting point is not geography or naming or branding. The starting point has to be what this part of the world has in terms of product that can excite the international buyer. The challenge we are set is that it needs to be comparable or better than what is available from the Wild Atlantic Way or Ireland's Ancient East. We must have a product that is of interest to the consumer. We must then figure out how to position it and make it attractive and exciting from the perspective of an international buyer. From there, we will move to branding and naming solutions. All this is within the scope of work, and we are due to have the final set of recommendations for the project by the end of March next year.

Mr. Tim Fenn

The first point I will make is tourism is a great story. We have been recovering, but our industry, no different from any other part of the economy, is suffering from growing pains. We speak about capacity and prices in Dublin. Dublin has 18,900 bedrooms which are sold every night. During 2015, the occupancy rates in Dublin were 82.2% throughout the year. This was the highest in Europe, along with London. At the same time, average room rates in Dublin were the 15th highest in Europe at €112. This year, our occupancy rates have increased. We do not have final figures yet for the full year, but we believe London has dropped so we will be on our own at the highest occupancy rate and we will be a long way off the top with regard to the average room rate.

The key point about Dublin is we do not have capacity. What happens in Dublin, like anything else, is when only a few rooms remain the prices may change a little, which is what gets all the press attention. With regard to competitiveness, Dublin would not be full if it was not competitive. The prices charged for Dublin day in, day out on any of the booking engines or metasearch engines are great value. There is no doubt there is an issue with regard to capacity. Earlier, we were asked to comment on how many rooms there might be. Fáilte Ireland has done a report with Fitzpatrick's and it ranges from 5,000 to 7,000. We must ask ourselves how this came about. Five years ago, we had a crash and nobody expected the recovery to happen so quickly. In the interim, all the money that might have gone into investment found its way into the land of distressed assets. It was much cheaper to buy a hotel that was on the market. In fact, one could buy an existing hotel for half the cost of building a new one. As a result of the recovery, we are at a stage where it is great to see an increase in activity in the market. The market is beginning to happen. Sites are available and we have developers and hoteliers, and we will see an increase. There will be growth in the capacity in hotels in Dublin in the coming three to four years. Perhaps the difficulty will be that in the coming year or two years, it will not be as much as we would like.

We have to be mindful of the fact that tourism does not sit on its own. We were asked to comment on whether Airbnb was a safety valve. One has to be extremely careful because this is a major problem worldwide. In Ireland it was traditional to have bed and breakfast accommodation, some lady or gentleman would rent out a room in their house and the money would help in sending their children to college or whatever. Now apartments and whole properties, not just rooms are being taken out of the residential market. The residential market is full. When one takes properties out of the residential market it contributes to other problems in the residential market. Today is not the day to go into this issue, but it should not be lost on the members present. Planning is key. If one plans to build for rental short-term private accommodation that is a business, it should be covered under appropriate planning. It should not be a case that somebody is allowed to take property out of the residential market and use it for business without appropriate planning. We are conflicted on this but the local authorities should take a serious look at it. If they do not, we will end up with the same problems they have in New York, Paris and Barcelona and tourism will not be well served by this.

I will now deal with the marketing spend. I will not go over the detail but the way we see it is that there has been a 45% drop in the marketing spend. We are losing share voice. The return on investment to the Exchequer is phenomenal and is not just about the amount of money that goes into the Exchequer each year from tourism, it is about the fact that it is creating economic activity in parts of the country where no other inward investment or other entrepreneurs can have a meaningful involvement.

In terms of the Rugby World Cup in 2023, we think there is a wonderful opportunity that Ireland and the IRFU could be in the game to host it. We are working with Fáilte Ireland, the same as we worked with the FAI, Fáilte Ireland and other agencies for the UEFA Euro 2020 bid, which was successful. We would hope that would happen.

A question on rural pubs is slightly left-field for us. Rural pubs are an integral part of communities and they are also an important part of tourism. I suppose we were very happy to see that in the past two budgets the excise duty was not increased. The reality is that every increase - and the excise in Ireland is one of the highest in Europe if not the world - takes money out of the pub. It makes it more difficult for the publicans to survive. I suppose the other aspect is the rateable valuation, where the revaluation which certainly affects us also affects the pubs. If one wants to help the pubs, one would ask for a reduction in excise duties for on-trade sales and ensure that local authority rates are rolled out right across the county.

The seasonal and regional aspects of the tourism business are key. Mr. Dolan will speak on that topic.

Mr. Joe Dolan

I thank the Chairman and members for the opportunity to speak to the committee. Without repeating all of what has been said, Ireland is doing very well in terms of numbers, revenue and so on but the growth in tourism has been inequitable. It is inequitable in terms of when people are coming and where they are going.

Regionality and seasonality are major issues. I own and operate a mid-range and mid-size hotel employing 60 people in County Leitrim. I am well positioned to comment on this. I will use a few different headings that were mentioned already to illustrate that inequitable distribution. I would not be still in business if VAT was not realigned with my competitors in Europe. I do not think the 9% VAT rate is a reduction; it is a realisation of what is a realistic rate of VAT. In terms of Brexit, as I am located quite close to the Border, what people do not realise is that the British market, while not the highest yielding market in terms of revenue, is our closest, largest market and is most accessible. It responds rapidly in marketing terms but what is most important in a regional context is that the British visitor has the widest, deepest penetration into rural Ireland in terms of the far-reaching rural parishes and during off-peak times of the year. We can never lose sight of that. The more regional and rural one is, the higher the dependency one has on the British market and on tourism in general. Believe it or not, tourism in rural Ireland is more important in non-traditional places than it is in Kerry because it is the only show in town. Personal incomes from tourism are higher in Boyle, Ballaghaderreen and Mullingar than they would be in Killarney because it is the only show in town.

There is a temporary pinch in capacity in Dublin at present, there is insufficient capacity but Dublin's difficulty is Ireland's opportunity. There are people coming to rural Ireland who would not otherwise be there. It is not all gloom. It is a temporary inconvenience that will work itself out in a couple of years in any event. That is assuming there are no major catastrophes internationally, which appear to be happening with increasing frequency and enormity in recent years.

The lakelands programme is a significant marketing programme for rural areas. It is the fourth brand proposition that has come into the markets. That covers off everything. Tourists are not interested in parochial or county boundaries.

Government has served us very well and we look forward to the continuing partnership. Tourism is the most efficient growth engine for economic development and employment generation, but it is also the most fragile so we must respect it as well. I see the argument that we have done so well with limited marketing resources but the analogy is that if one is running on an empty tank, when the tank empties, it grinds to a halt. We must not be complacent. We must keep our foot on the pedal.

Mr. Paul Gallagher

I will try to answer some of the questions directly. I was asked if we have a line of sight on the number of full-time, part-time, seasonal jobs. I am afraid I do not but if I can find them, I certainly will furnish the information to the committee. Of the jobs growth, there are about 43,000 jobs, some 72% are in the regions. That tells the story about the health of tourism around the country. I would love to see the season extended and the pattern is starting to show that seasons are getting longer so that visitors are coming more in the autumn and spring than they would heretofore. Some of the key drivers are activity-based holidays, water in particular. We have such significant benefits in terms of our natural resources and they are major attractions. Some of the barriers to seasonal growth in tourism are the closure of visitor attractions, which close down or are open for a shorter period. Daylight impacts on people's days, so the day can be quite short. While the pubs are important, going to the pub at 4 p.m. can be done on one or two days in a row but one could not spend a week doing it. I agree with Mr. Dolan's point that Dublin's weakness in having insufficient rooms is an opportunity for the rest of the country to do better. There is some active programming by tour operators whereby instead of the arriving tours staying the first night in Dublin, they are being taken elsewhere. One will see that around the country in places such as Waterford, Drogheda, Kilkenny and so on that are full on a Friday night out of what I would call traditionally Dublin business. That is very good for the regions. Let me assure Senator Feighan that this will, in a sense, drive the OPW to do things a little bit differently because the visitors will be on the ground. The business operators in the regions will see the need to keep these people engaged and entertained and experiencing our products. They will drive the OPW to change its opening hours to reflect patterns of consumption. That is to be welcomed.

In regard to Airbnb, I would go a little further than my colleagues. I believe Airbnb should be regulated. I think the Revenue should have line of sight of Airbnb, where it is at a scale that is a real income. There were some shock stories on the radio recently about people having 40 properties in Airbnb. I see it as a displacement for families to set up and live in urban areas and around the country. The long-term outcome of that will be that school attendance will fall and schools and shops will not remain open and communities become stripped of other very essential services if Airbnb is allowed to take hook.

I do not believe it should be allowed to trade unfairly. As yet we cannot see the size of it. During busy periods Airbnb is incredibly large, especially in Dublin, and on quiet nights it is particularly small. It expands and contracts very quickly to meet market peaks. It should be done.

I was asked about the tourism policy document that I have critiqued as being out of date already. I do not have an answer as to what the targets should be. Next year the Irish Tourist Industry Confederation, ITIC, will undertake wide-ranging research by way of in-depth interviews with the industry's top 100 business leaders. For the first time the tourism industry will write its own plan. ITIC will deliver tourism's plan for tourism and we will do it on a five-year window because anything over five years will quickly become irrelevant. We will try to follow the agribusiness which has been very successful in writing plans, but of course that is very dominantly anchored around some very large agribusinesses that can afford to produce these plans.

I was asked about seasonality and regionality. One of the other drivers is around the idea of capital investment. The industry has been lacklustre - I do not mean the agencies, but rather the private sector part of the industry - in being prescriptive about what we might need on the ground. In the first quarter of next year, ITIC will carry out fairly compelling research to try to identify capital infrastructure, which if undertaken in the regions in appropriate scale, could happily and I think will anchor new activities for people right across the regions. There are plenty of areas where it could be better. The midlands brand or the Shannon corridor brand has been mentioned. When one gets to Galway and goes right, people in Donegal will also feel the same about tourism not having reached its potential. We hope to address that.

I am happy to say there is no dissent among the tourism body. We work very closely with the agencies. We are in a very fortunate position. We are a fairly "go-to" crowd. We tend to make things happen quite quickly. I do not think any other industry would reflect the level of co-operation we share and enjoy.

What does the industry do for itself? We do not rely on the State organisations, Fáilte Ireland and Tourism Ireland, to help us paddle our canoes. We paddle with them, but we also contribute to that success. I will give a Dublin example. The Dublin hotel community this year and into next year will contribute €600,000 towards the marketing of Dublin in the UK, particularly around the Dublin brand, A Breath of Fresh Air. Many active people in the industry serve on marketing partnership groups. They go out to the different overseas markets to engage with the industry in those markets about what is necessary for them to drive business to Ireland. Mr. Gibbons has mentioned the central marketing partnership, which really is an extension of what was the tourism recovery task force, which, in itself, managed to turn around tourism's fortunes from 2010 onwards, where we lost 1 million British visitors in about 18 months.

To put some perspective on our success, the visitor numbers from the US to Britain have declined by about 1.5 million at the same time as we have doubled ours. They would like to join Tourism Ireland in marketing Ireland and Britain in the United States. Members of the committee will be glad to know that we will not do that. That gives an indication of how proactive the industry is and how compelling the industry has been in its ability to turn around its competitiveness, its offering, the quality of its product and particularly in support of the brands that Fáilte Ireland delivers. Those brands have been enormous hooks on which Tourism Ireland has been able to engage the markets to sell Ireland in a new way.

As Mr. Quinn said, county jerseys going out to sell Ireland is more about the county feeling good about the county than actually driving visitor numbers to Ireland. I would share his view. When tourism spend is fractured to do that activity, it has no benefit except that we all just feel great. Employing people and having Exchequer returns are far more beneficial to tourism than wearing jerseys - except for the green jersey.

Senator Pádraig Ó Céidigh

I have had a big involvement in tourism over the years and have been on the board of Fáilte Ireland. I have never seen an organisation or a group of organisations working so well. They are a credit to the country. They are doing a phenomenal job. As Mr. Gallagher said, the State agencies and the industry work really well together and have created tremendous success. I may not be 100% correct in this but I understand that every €1 spent in Ireland by a foreign tourist generates something like €1.52 for the Exchequer. A 52% annual return is phenomenal. The State is benefitting significantly from the work and effort of the organisations represented here.

Those involved in tourism in Ireland are winning in an industry that is the most diverse and competitive in the world. People have many choices of where to go and what to do on holiday, and they are looking for variety and change. We need to increase the market. However, we are not out of the recession years. We have an image and we suggest things are great. As far as I am concerned, from an economic perspective things are not great. Some people mentioned earlier that we have a three-tier economy and that is particularly true in the tourism industry. Mr. Dolan mentioned Leitrim, and it is very true about Leitrim and central Ireland. The Wild Atlantic Way has been a phenomenal success. I commend the imagination, creativity and entrepreneurship of Mr. Gallagher, Mr. Quinn and the team in Fáilte Ireland, together with Mr. Gibbons and his team in what they are doing to market that worldwide. I do not know how Mr. Gibbons does it - I get his tweets and they are from all over the flipping world. That is absolutely huge.

The Wild Atlantic Way is doing very well. The efforts and plans regarding the lakelands and so on are critical. As Mr. Dolan rightly said, tourism is the mainstay of many small areas not just for pubs and bed and breakfasts, but also for local bus hire companies and so on.

I return to the macro view. A significant amount of joined-up thinking is required. There is a plethora of organisations dealing with tourism in Ireland. Transport is critical for tourism. Is there a tourist transport strategy or can the organisations represented here influence tourism transport? The OPW was mentioned. The tourism industry is very much in the OPW's hands regarding our national parks and heritage, which are obviously important from a tourism perspective. The Leader programme is involved with tourism. The Western Development Commission is involved in tourism. Local authorities are doing their own thing when it comes to tourism. We do not have proper joined-up thinking and strategy to support what the State agencies are doing on a national and international level, and what the industry is doing. I may be wrong on joined-up thinking, but I do not think I am.

I mentioned regional strategy. I am a bit concerned about price inflation and we do not want to go back to the price inflation we had in 2004, 2005 and 2006. We got significant adverse PR over that. Tourism Ireland, in particular, and Fáilte Ireland had a lot of work to do to counteract that. I was on the board of Fáilte Ireland at the time and it was a significant issue.

Another issue at that time related to the markets. We were very heavily dependent on the internal market at that time and we were beginning to go into a recessionary period. There was big concern about how the hotels and wider tourism industry outside Dublin could cope because we were heavily dependent on the local market. I ask Mr. Keeley if that has changed and if so how. Have we sheltered ourselves a bit in that regard?

The witnesses spoke about CERT, third level colleges and SMEs regarding the training and quality of the product. They also spoke about the marketing side of it. Most businesses in the tourism area are SMEs - bed and breakfasts, small bars and so on. While tourism is a part-time income for them, it is a critical part-time income in order for them to survive.

I have a couple of points on Brexit. I am using the delegates' figures so they may correct me if I am wrong. The income from the tourism industry in the year is €7.5 billion. Some 24% of that comes from the United Kingdom. Oxford Economics states this revenue will reduce by 2.5% in the coming year. If these figures and my calculations are correct, they represent a €45 million reduction for tourism in Ireland next year just as a result of Brexit. I am trying to quantify it. I want to know whether I am correct in that. The loss of €45 million is a lot of money but, compared with €7.5 billion, it is not huge. Mr. Gibbons referred to growth next year. It still looks like we are in a good position. I am trying to quantify the effect of Brexit in regard to the overall picture.

Mr. Niall Gibbons

The only question relevant to me is the Brexit one. My colleagues will probably answer the others.

Senator Pádraig Ó Céidigh

I would value the answer of whoever wants to comment.

Mr. Niall Gibbons

To clarify, the figure of €7.5 billion is the total value of the industry, domestic and international. The expenditure on the island of Ireland last year attributable to international arrivals from the United Kingdom was just short of €1.4 billion. Oxford Economics has done a lot of work for us on the cost of Brexit. The total number of British people travelling abroad every year is forecast to decline by 2.5%. It is not just a matter of travel to Ireland. Brexit has economic consequences that move beyond Britain. I alluded in my speech to the fact that Oxford Economics has revised downwards its forecast for tourism growth four times this year. If its forecasts are correct - economic forecasts are not always right - the reduction in tourism revenue is likely to be in the region of €120 million by comparison with last April and May. It is not just the British market that is affected; Brexit has economic consequences that spread beyond all markets. It has economic consequences for growth in general. That said, the figures are based on economic forecasts, and these change. I am attaching a health warning to them. They are the only projections we have. They are the best in the class but it has not always been a great class in the past five or six years.

Senator Pádraig Ó Céidigh

That is fine. I just wanted the committee to have a sense of the potential monetary effect of Brexit.

Mr. Niall Gibbons

With regard to the number of British people travelling abroad, the decline of 2.5% that is forecast covers all destinations. There is a greater consequence for the island of Ireland because our dependency is greater. If I come back here in three months, this figure could have changed again.

Mr. Paul Gallagher

With regard to the question on the role of public transport in tourism, the Irish Tourist Industry Confederation has conducted research, which is published for approximately two months. I am happy to furnish members with a copy. We have explored the role of public transport in tourism as something of an unknown. If one is standing in Killarney waiting for people to step off a train, it is probably quite evident that it is a tourist train but, beyond that, there is not really very much buy-in in the sense of determining the function.

Some of the recommendations in the report are on a centralised ticketing portal, particularly one that can be accessed overseas so people can plan their itinerary before they arrive here. It is envisaged to have ticketing across different platforms or modes of travel, which would be joined up. There was an exploration to address the necessity for tourists to keep returning to the hub in the east in order to proceed elsewhere. The east is the looped gateway all the time so if one goes from Dublin to Cork, one has to come back to Dublin to go to Galway. It is a matter, therefore, of finding better links to keep people in the regions rather than having them return to the hub of Dublin continually. There are many other recommendations. The report is pretty good.

Mr. Paul Keeley

Collaboration has rightly been described as something of which we must always be mindful. From our perspective, it is the bread and butter of what we do. I am very conscious that, in trying to unlock growth in the regions, the product lies in individual businesses and the warmth of the welcome lies in individual communities. As Mr. Quinn stated, we have put in place strategic partnerships with a number of the State agencies, including the OPW, the National Parks and Wildlife Service, Waterways Ireland and Coillte. More important, we absolutely welcome local authorities becoming alive to the potential of tourism as an economic engine in their counties. Having that appetite to engage with tourism is fantastic. We work on the ground with local authorities, Leader programmes, chambers of commerce, etc., to try to ensure that, in unlocking stretches of the Wild Atlantic Way or Ireland's Ancient East, the impetus comes from the ground up. Pride of place, a sense of place and a sense of everybody pulling together become critical. I would like to believe there is no complacency in this space at all. It is no coincidence that many of the tourism hotspots will also do well in TidyTowns competitions. There is no tension between the chambers of commerce and the local authorities. Everybody is pulling together. From our perceptive, the county jersey makes a lot of sense when trying to mobilise the supply side. It is not terribly relevant to international marketing but, in building from the ground up, working the networks hard is critical to the product development effort and unlocking the kinds of products and welcome that enable buyers to freshly programme new parts of the country. It is absolutely central to what we are doing.

Chairman

That is everything covered. I thank the witnesses for attending, making their presentations and engaging with the members. The meeting was very informative and will certainly help the committee in its role and in making recommendations to the Government. It was quite a lengthy meeting so I apologise again for the delay in starting.

The joint committee adjourned at 4.20 p.m. until 9 a.m. on Wednesday, 16 November 2016.