I should like to welcome this Bill which proposes various improvements and developments in regard to the expansion of the tourist industry in this country. The proposals for the regulation and grading of caravan sites are welcome. The development of these sites is important from the point of view of the promotion of tourist traffic and, indeed, with a view to making possible cheap holidays for some of our own people. It is important that these sites should be properly developed and controlled. Therefore, we welcome the proposals. The development of caravan sites is associated with the encouragement of car tourism in this country and is well adapted to our tourist potentialities because of the extent of our road network and the low density both of our population and of cars on our roads. The proposals, therefore, to extend the amenity loans to places which are not resorts, to make possible the development of amenities in those places in all parts of the country open to car tourists between the main resorts and various areas, are also welcome.
The extension of the resort development limit is something which is desirable. It has been disappointing that the progress in availing of the £1 million set aside by the Government has been so slow particularly as so many of our resorts clearly need development and improvement but, like many schemes of this kind, it takes time to get them off the ground and to get people thinking in terms of this kind of useful development. Some of the improvements effected in some of our resorts are overdue and very welcome. In connection with this I wonder whether the Minister has ever considered one particular kind of assistance to tourism, which is available in Northern Ireland, but not available here? Many of our resorts are lacking in forms of entertainment suitable for the wet weather which occasionally occurs during our summers! In Northern Ireland there are arrangements to subsidise losses on entertainment facilities provided at tourist resorts, with different rates of subsidy for the off-season and the peak. Something of this kind, which would encourage the development of these facilities by helping promoters and enabling them to initiate the development of entertainment facilities, in the knowledge that the losses will be helped out in the early years before these facilities become well established, could be helpful. Indeed, it would be a good thing if local authorities were encouraged to provide entertainment, as well as private enterprise. One of the odd features of this country is that local authorities have not initiated facilities of this kind which have been established in Britain even where the local authorities concerned are controlled by Tory councils predominantly of local business men who would naturally not want the council to intrude on their activities. Nevertheless, here we have not had this kind of local authority development.
Anything that could be done to provide suitable entertainment for people in our resorts would help to get over the problem of the bleakness of life in a resort during a period of wet weather. I wonder whether the Minister has considered the adoption of a scheme similar to that in Northern Ireland. It is the only tourism development scheme in Northern Ireland than which we have not got something better. In general, our schemes are in advance of those not only of Northern Ireland but of other countries and this is the one case where Northern Ireland has something to offer which we have not.
The increased grants for the provision of additional hotel accommodation are very welcome indeed because it has become increasingly clear that the main bottleneck in the development of our tourist industry is becoming, and is likely to be in the future, shortage of hotel accommodation rather than transport, although there have been times, for example, in 1964 when bottlenecks in transport capacity—air transport—temporarily impeded tourism. The proportion of the Government's capital programme devoted to the development of hotel accommodation is extraordinarily small. Out of £100 million something of the order of £200,000 is provided for this purpose.
It is clear that this is inadequate to generate investment in the volume of comfortable hotel accommodation which is needed and whatever stringency may be desirable—indeed tightening up in some areas may be desirable in the capital programme— this is one area where funds must be provided for larger expansion. Failure to expand this small amount of money could frustrate much larger investment in such things as transport and other facilities necessary for the development of tourism simply because there would not be the accommodation available in which people could stay. Our investment in other aspects of tourism seems to be in balance and the accommodation aspect alone stands out.
All the studies that have been carried out during the last couple of years by Bord Fáilte have shown that the area where we are now in danger of lagging behind is hotel accommodation. This bottleneck, however, is not country-wide. There are only three of the eight tourist regions in which accommodation was used as to 80 per cent or more during the period July to September, 1964. There is, even in the peak period, spare capacity and there can be no question of building new hotels indiscriminately throughout the country. Indeed, the existing accommodation can handle about 30 per cent more business in different areas than at present. Though this is true in certain areas, though there is this spare capacity in the peak period, there are many parts of the country where not only in the peak period but outside it, accommodation is in short supply. In 1964, Wexford, Killarney, Clare, Galway and Salthill all had occupancy rates of 95 per cent in July and August. Clearly, there is a serious bottleneck there. There is need for careful planning of hotel accommodation.
In some areas the peak period is extremely short; in others, like Dublin, it continues for a longer period. Consequently, the return on investment varies enormously, depending on the circumstances of the area. Where there is a bottleneck in accommodation and where the volume of local functions associated with the peak period is small, the return on investment is small—it is, in fact, negative in many cases, even with the assistance of the grant of 20 per cent. At the same time, the possibility in other areas of a viable investment without any State aid exists. One well-known case is a major hotel in Dublin which went ahead without any assistance and which, by all accounts, is reasonably profitable.
In trying to expand hotel accommodation where it is needed, we are up against the difficulty that the present fixed system of the 20 per cent grant, while it has the advantages of simplicity, is inappropriate to our needs. In some areas, in parts of Dublin for example, it may mean we are giving money to people who do not need it. In many parts of the country it means that the incentive to invest in additional hotel accommodation is inadequate— that the rate of return for investment, even with the 20 per cent grant, is not sufficient to encourage the provision of extra hotel accommodation. If there were enough assistance in such areas, investment would be viable as the running costs can be covered and the promoters' share of the capital would in this way be made remunerative.
We need, therefore—I should like to ask the Minister to look into this— a much more flexible scheme for this purpose and I think Bord Fáilte have now reached the stage where, with their surveys of hotel occupancy in different parts of the country and their information on the economics of hotel operation, they should be in a position to set out a scheme under which different parts of the country would be denominated, some perhaps for 50 per cent, others 40 per cent, 30 per cent, 20 per cent, and others, perhaps Dublin, where no grant would be provided. The information necessary to carry out the calculation required should show just what kind of grant would be necessary to make the building of a new hotel or the expansion of an existing hotel economic. That information is now becoming available and I suggest we should put it to good use by developing a flexible system of assistance which would ensure the availibility of good hotel accommodation in any area where there is a demand for it and, always of course, where there are efficient operators. It is no good giving grants to enable people to make large profits out of inefficient hotel operations.
There is also the problem of the seasonality of tourist traffic. It is very acute in Ireland, almost more so than in any other country in the world, and from the employment point of view, as Senator Murphy has said, this creates real difficulties because staff are employed for a couple of months each year and are out of work thereafter. In any scheme to expand hotel accommodation, we must cater for seasonal demand and it is important that Bord Fáilte keep in close touch with the Council for Education, Recruitment and Training—the body known as CERT—with a view to overcoming these staff problems. We must mitigate the problems which this seasonality of business brings about for staff. It may be that because of this seasonality of business, and consequently the seasonal nature of employment, we should consider forms of accommodation, such as motels, which do not require a large labour force but which can operate with a small, skilled labour force rather than have a large labour force for a couple of months and have them unemployed thereafter. Any expansion in this direction should be done in close conjunction with CERT which was set up for the adequate provision of staff for the hotel industry.
In expanding hotel accommodation, the problem arises of whether we concentrate on expanding existing accommodation or developing new hotels. In this matter, Bord Fáilte should have a fairly specific policy. In areas where there exist hotels capable of expansion, all efforts should be concentrated on expansion of these hotels and no particular encouragement should be given to the building of new hotels if the existing hotel owners are willing and able to expand their facilities. We can, in this way, make the best use of our existing resources of skilled manpower. There are not many first-class hotel managers in the country. We can make the best use of those we have by expanding the accommodation under their control rather than by a proliferation of new hotels in areas where they are not needed, thus overstraining our resources of skilled manpower and skilled managers. In areas where you have existing hotels you can in this way make the best use of the reception rooms and the restaurants in those hotels. The investment in those places is likely to be more economic.
We must, of course, face the fact that there are many places in Ireland where no hotels exist despite the fact that they are areas which would attract visitors if accommodation were available or where the accommodation is such that it could not be readily expanded to provide the particular kind of hotel which is required. We must accept the fact that in certain areas new hotels will be needed and Bord Fáilte should give encouragement for their development. This is something which could be usefully done in conjunction with the Irish hotel industry which I can say from personal knowledge of the industry, as consultant to the Irish Hotels Federation, is more than prepared to co-operate. I think there is a possibility here of developing a scheme under which the existing Irish hotels, through the Irish Hotels Federation, would jointly, with Bord Fáilte, help to finance the development of new hotels in areas where, by agreement, they are required. Those hotels could then gradually become self-supporting private enterprises.
You could provide a fund, in this way, through Bord Fáilte, which could be a revolving fund through which people who are engaged in running a hotel could gradually buy out the interest of Bord Fáilte and the money thus released could then be used for other hotel development. It seems to me that the small-sized and the medium-sized hotels are particularly suitable for personal ownership and management by private enterprise. I certainly have no inhibition about State enterprise or any ideological predilections for private enterprise but it seems to me that private enterprise is particularly suitable in regard to hotels to which people come when they want personal treatment, personal service and personal contact.
CIE, through Óstlanna Iompair Éireann, operate some large hotels in a number of tourist areas. They are obviously well-equipped to do this job. It may well be that in certain areas there is room for a large hotel which could be best operated through them. I would not exclude the possibility of the development of such hotels but the main requirement in areas which have some scenic attraction, and are particularly attractive to tourists are hotels with 30 to 50 bedrooms capable of handling up to 100 people, including, in many cases, coach tours. Those hotels are best operated by private individuals. Bord Fáilte could help towards the development of those hotels by working jointly with the existing hotels and letting them be bought out by private enterprise eventually. In general, where the State is active there are good reasons for not denationalising State activities and handing them back to private enterprise but in this particular area this might be the most useful way in which Bord Fáilte could operate.
We have to consider how much new accommodation we need. There is a certain amount of disagreement on this. Bord Fáilte have substantially raised the target which was about 550 to 600 rooms a couple of years ago. They now believe that 1,500 rooms per annum will be required in registered accommodation. A careful study of the situation suggests that this may be a bit too high. Certainly, the existing target is inadequate and if we can only attain 500 to 600 extra rooms every year the growth of tourist traffic will be frustrated and the attainable targets for the Second Programme for tourism will be frustrated. But I believe 1,500 rooms may be excessive and there is reason to believe that Bord Fáilte may be overestimating the need in their desire to increase tourist traffic to Ireland.
I have made a study from the available statistics and this shows that between 1960 and 1964 there was an increase of three million bed-nights spent in Ireland by visitors to this country but the increase in bed-nights in registered accommodation was only one million in this period so that two-thirds of the increased volume of visitors to this country were accommodated outside the registered hotels and guesthouses. We must expect that the development of higher-grade tourism and the promotional efforts by Bord Fáilte to attract car visitors, as well indeed as the lower volume of people coming to visit relatives as our emigration remains at a lower level than in the 1950s will change the pattern of growth of our tourist business. Bord Fáilte are thus right to believe that in the years ahead the proportion of the increase in visitors to this country who will look for registered accommodation will be bigger than in the past, but I think it is questionable if the proportion of the increase requiring registered accommodation will rise from one-third to three-quarters, which Bord Fáilte have assumed in calculating their requirements of 1,500 additional rooms per annum. I would have thought this proportion might lie at about one-half and that of the 2,000 rooms required, one thousand, or perhaps, a little more, would have to be provided by registered accommodation. In other words, the existing target should be doubled but not perhaps trebled. This is something which requires further study.
Certainly I would welcome any move by the Minister to increase the resources available to finance additional accommodation. I believe we must expand more rapidly than we have been expanding but we must not overexpand. We must try to discover what is the optimum rate. I believe this is higher than at present but somewhat lower than the Bord Fáilte target.
There is one other matter in relation to accommodation and that is the type of hotels required. There is a divergence of view on this. Bord Fáilte have said that in order to attract more tourists to Ireland we require a fairly high standard of accommodation. They believe the kind of people who use this type of accommodation will spend more money while they are here and that when those people return to their own countries more people from lower income groups can then be persuaded to come in their train—for Bord Fáilte also wish to attract other visitors who may not be able to spend as much money. There is, however, a view which is widely shared, and which was expressed almost unanimously at the recent Tourism Conference, that Bord Fáilte is aiming a little too high in this respect. The view appears to be that we should increase the grade B and not the grade A accommodation. The view held by the people operating hotels and many other interests at this conference was that grade A was all very well but that the cost of grade A accommodation and the prices that might have to be charged for it would be too high for most visitors. They said that something nearer to grade B accommodation would be more desirable.
There is a divergence of view here and it would be desirable that Bord Fáilte should take account of that. They are right in principle to seek higher-grade accommodation but perhaps this might be at a price which would not be in the price bracket of many visitors and the possible advantages would be then frustrated. If we could give grade A accommodation at grade B prices that would be ideal, but we must in any event give the best value we can. This divergence of view between Bord Fáilte and experienced people in the industry is not very marked. It is a question of emphasis rather than anything else. It is something to which attention should be given.
Bord Fáilte are to be congratulated on this annual conference that they have inaugurated to bring together all the interests in the tourist industry to discuss the problems they have in common, to present their plans and ideas for criticism, and to listen to and answer criticism. It is an excellent arrangement, and it has promoted in the tourist industry amongst the different interests, a sense of co-operation and an interest in development which one would like to see in other industries. Bord Fáilte have given a lead which other Government agencies might consider following. The purpose of this type of conference is not only to tell people in the industry what Bord Fáilte are planning but also in order that Bord Fáilte can learn what the industry is thinking. Where there is a slight divergence of view in the industry one would like the Board to be receptive to other views and not too rigid about their plans. Bord Fáilte have applied a professional expertise to their planning which is not seen in many other tourist authorities. Nevertheless, Bord Fáilte can benefit from the views of the people in the industry to which they should be prepared to pay attention.
The whole question of prices is difficult. There were criticisms of hotel prices in this House in a debate last summer and there were criticisms from people outside it. Some of this criticism was misconceived. There are problems which are not widely appreciated. I referred to one at that time: the problem of high wages which arises in Dublin to a greater degree than in many other countries because tourist labour here is organised by the trade unions. That is entirely creditable and good, but it means that the wages paid in the industry here are in many cases higher—and in some cases much higher—than elsewhere.
This is a paradoxical consequence of not having full employment. In other countries where there is full employment there is an influx of cheap foreign labour which makes it impossible for the trade unions to organise. In Ireland as we have not got full employment, we have not an influx of cheap foreign labour. We have not a mass of people coming from the southern European countries to be waiters. Consequently the industry in Dublin is highly organised and the wage rates are greater than they are elsewhere. Anyone who saw the film about the Savoy Hotel on the BBC—on which the Savoy Hotel tried to take legal action to prevent being shown — knows that the staff were interviewed and that they stated that they were paid £5 or £6 a week, plus tips, and will have been somewhat shaken by the contrast between that and the rates paid here. That is one reason why we have to expect that hotel prices in Dublin are relatively higher than they might otherwise be. We do not have the sweated labour that other countries have.
Another problem which we have to face is that the accommodation in our hotels which for a long time was fairly static is now expanding rapidly. The provision of new hotel accommodation costs a lot more than the written-down cost of existing hotels. It has been estimated that in Ireland our hotels are worth about £30 million. They stand in the books of the proprietors at that figure, but the cost of replacing them at a standard which would meet Bord Fáilte requirements would be about £70 million. As time goes on, and as our hotels become better and more modern, inevitably the costs involved and prices involved are pushed upwards. That is another problem we have to face.
Another provision of this Bill is an open-ended provision for Bord Fáilte financial requirements to enable it to provide the services it offers. This has hitherto been limited and the Minister's decision to remove the limitation is very acceptable as each year there is an opportunity to consider it when the Vote comes up. The increase in Bord Fáilte's promotional expenditure has been very carefully worked out and in the past year or two it has begun to produce an excellent and worthwhile expansion of the business. We have to spend more money to get more money in this area. In the provision he has been making for Bord Fáilte the Minister has taken a very enlightened attitude which will pay off in the years ahead. Indeed, I do not think that the provision we have made for Bord Fáilte, their terms of reference, and the Government's willingness to let them move into the various areas where they can do useful work is always appreciated.
Other tourist authorities come to Ireland to learn how Bord Fáilte do the job. Bord Fáilte are a leader in the field. We do not always realise, for example, that a hotel classification system is far from universal. There is no such thing in Britain. The British Travel Association have no hotel classification system and consider it impractical and undesirable, and not to be contemplated. I had the experience of discussing that with a tourist authority in Northern Ireland and so insular were they that they said that virtually no countries classified hotel accommodation. When I pointed out the number of countries that do classify their hotels it developed that "virtually no one did it" meant "Britain did not do it". They were unaware that it was done almost everywhere except in Britain and Sweden. The tourism conference to consult with the tourist industry is another step forward by the Board.
Senator Murphy referred on the last occasion to some figures that got publicity in Northern Ireland some weeks ago and which purported to show that the tourist business in Ireland was declining. I have taken the trouble to investigate this because the authority given was that it was a statement made by the Economist Intelligence Unit with which I am associated in Ireland. These figures are of no significance whatsoever. They are the result of an inadequate sample so we need pay no attention to them at all. They were referred to in an article in a publication of the Economist Intelligence Unit but they were taken from a survey by the British Travel Association. There is no basis for them. There was a slight fall in the proportion between 1961 and 1963 but it made a recovery in 1964, and in 1964 our share of the British holiday market grew. Indeed, the whole of the increased number of British tourists in 1964 came to this country because of the promotional activities of Bord Fáilte. We can dismiss these figures because they do not give a true picture.
What has been happening with regard to tourist transport facilities is important. Aer Lingus are providing adequate accommodation but our main problem has been car ferry capacity, because it is clear that much of the future of our tourist industry lies with the car traveller who comes here and makes use of our empty roads. Car ferries are now beginning to be provided and this is giving a new injection into our tourist industry but more needs to be done in this regard.
It was disappointing to read in the correspondence of the Irish Times about a year ago that an attempt by Irish interests to provide a car ferry between Rosslare and a port in South Wales, I think it was, did not succeed. Indeed, a suggestion was made that the Government intervened to prevent its development because of representations by British Railways. If that is so, one would like to know why the Government thought it necessary to intervene to prevent public and private Irish interests from developing a useful service because it did not suit a foreign transport monopoly. I should like to ask the Minister if there is any truth in that story and if, indeed, steps were taken by the Government to prevent this development and if so on what grounds they took this action. The Government may have had reasons but we should be made aware of them. On the face of it, it is a matter which requires explanation.
Another possible car ferry service which has been investigated by private industry but has not so far materialised would be of great importance, and that is a connection direct to the Continent. This is feasible. It is a distance which could be covered in a period of time that would be acceptable to people travelling on it. I know that it has been looked at but so far nothing has materialised. I should like to ask the Minister whether he knows if the reason for failure to initiate such a service so far is a doubt as to its viability in the early years, and whether the project had to be dismissed as premature because there was not enough traffic to meet the high initial cost so as to be sure of profits in the early years, resulting in a decision that it should be left over for some years. In such a situation it could be appropriate for the Government through Bord Fáilte to intervene and offer a diminishing subsidy to cover losses being incurred for a short period of years in order to get such a car ferry going perhaps five years earlier than the time when on the merits of the case in pure private enterprise terms it would be put on. This continental car ferry could develop continental tourism to Ireland which we have not yet begun to develop. Bord Fáilte are beginning to make efforts in this sphere and the volume of business from it is capable of being enormously expanded. I know that the Board plan to develop it in the years ahead and envisage big developments. Nothing could help this as rapidly as having a direct car ferry service. Nowadays very many tourists on the Continent go on holiday by car, and this business of having to book across the English Channel, drive across England and then cross the Irish Sea is something which is bound to discourage them from coming here. I know that there is the Aer Lingus car ferry link with Cherbourg but the length of the journey is far too long for an economic service. There should be the possibility of a shipping service to cater for this traffic. This is something which we should push ahead with, and I would like to hear if the Minister is making plans or if there are private plans of which he knows, which he could assist by providing a slight and diminishing subsidy. The Minister quite properly dislikes all subsidies for transport purposes, and this is a very good thing, but there are special cases, and this is something which everybody knows would become viable and profitable in a period of years when Bord Fáilte have developed the business. It could be given temporary assistance to get it off the ground and so assist progress during the remaining years of the Second Programme for Economic Expansion.
I should like to endorse the arrangements for regional development of tourism established by Bord Fáilte and to welcome its regional boards which are proving a success under the energetic guidance of the local managers, most of whom have been dedicated to their work and have made a very good job of it. Because of this there is developing a local interest in tourism and in the provision of facilities that was not there before, including the establishment of many hotel booking offices throughout the country which are facilitating holiday-makers coming through this country. This is something particularly useful for car tourism where people like to be free to move around and to feel that they have some assurance that they will be fixed up for a bed if they have not booked in advance even during the peak season. It is particularly welcome for this reason, too, that it is helping to build up room occupancy in the hotel industry and thus to make it more economic. The whole regional scheme is very welcome and we are glad to see that it is becoming a success.
The tourist industry is, indeed, of enormous importance to our external balance, and it is being energetically developed. It is true that mistakes have been made in the past, and mistakes will be made in the future, but every effort is being made by all concerned —the Government, Bord Fáilte, the transport and hotel industries—to make the most of it, and there is a degree of co-operation between the Government agency responsible and private interests which I think sets an example to other sectors of the economy.