The Tourist Traffic Bill, 1979 proposes to raise the statutory limits on Bord Fáilte's accommodation expenditure from £16 million to £25 million and on non-accommodation expenditure from £4.75 million to £10 million. The increase for accommodation proposed represents a very considerable stepping up of the scope for expenditure as against previous similar measures.
I am pleased to say that in the context of increased limits I intend authorising Bord Fáilte to introduce a new cash incentive scheme for new hotel bedrooms and an extension to the country at large of the existing supplementary holiday accommodation scheme which up to now has been confined to the special development area which embraces, roughly, the 13 westernmost counties from Donegal to Kerry.
Tourism to Ireland has staged a strong recovery and we have had an increase of nearly 480,000 visitors, equivalent to 27 per cent, in the 1977 to 1978 period. All successful tourist destinations are founded on a satisfactory range of access transport facilities and an adequate supply of accommodation. The Government's Green Paper of last year recognised that an accommodation shortfall could act as a constraint on growth. One of the options in the Green Paper was to anticipate such a shortfall by bringing forward plans for future investment and concentrating on securing accelerated development for the 1980 season and immediately thereafter. We are now, in effect, taking up that option. Despite the problems which tourism has faced this year, I have every confidence in the future of tourism and in its ability to overcome the present temporary adversity and to continue to expand and develop. The decision to reintroduce accommodation grants expresses that vote of confidence in practical terms.
Tourist projections prepared by Bord Fáilte showed that tourist numbers would continue to rise to 2.7 million by 1981. A very important feature of the growth is that the numbers of ethnic or Irish-related visitors from abroad are tending to stabilise so that a considerable bulk of the projected growth represents non-ethnic visitors who will make more use of commercial accommodation. In settling the type of incentive scheme which would produce the best results, I have had regard to past experience, the financial state of the industry and the level of incentive which would provide the proper stimulus. The principles embodied aim to secure optimum increase in the accommodation stock at national and local levels and the main features are as follows:
(a) it is framed on a selective basis so that it will represent a correct response to our needs;
(b) it is related solely to the cost of providing additional bedrooms;
(c) there will be different levels of grant related roughly to estimated need with grants from 25 per cent to 35 per cent of room cost subject to fixed cash maxima;
(d) priority will be given to the extension of existing hotels over the construction of new hotels, and new hotel construction in Dublin, Cork, Limerick, Galway, Shannon, Killarney and other major conurbations with a substantial tourism-business base will not qualify for grants.
I have instructed Bord Fáilte to prepare a detailed scheme embodying these principles so that on passage of the measure now before the House they will be able to consider applications and undertake the financial commitments, for which new moneys can be provided.
The other major change which I propose is the extension of the supplementary holiday accommodation scheme which was established in 1967 and which at present applies only to the non-urban areas within the special development area. The scheme, as its title implies, was designed to encourage the provision of a supply of extra bedrooms through the addition of new rooms to existing private houses. Over the past number of years farmhouse accommodation has developed into a very distinctive tourist product in its own right. The high rates of occupancy enjoyed suggest that there is considerable scope for development of this product. I have, therefore, authorised the countrywide extension of the scheme, a doubling of the size of the fund and a raising of grant levels from £700 to £1,000 per house in a single year subject to a maximum of £3,000 overall. The scheme will also be used to upgrade many existing approved farmhouse, town and countryhouses in all areas of the country through the provision of extra facilities such as hot water, handbasins in bedrooms and so on. These improvement works will enable small rural areas to be promoted more vigorously and through a longer season, especially in those areas where it will be possible to build on activities such as fishing and shooting. The preference of the special development area will be retained by provisions designed for topping up grants to premises located there.
The new arrangements for hotels and supplementary accommodation will be introduced strictly in accordance with the main features I have outlined and will operate on that basis for some time. I will, however, see to it that all details of the schemes will be carefuly monitored to ensure that we get a satisfactory response. Bord Fáilte will, of course continue their existing programme of ongoing capital accommodation expenditure on such items as camping-caravan sites, An Óige type developments and its accommodation improvements scheme except that in the last case and in tune with the drive to concentrate on providing extra accommodation the scheme, as is now generally known, is now being focussed on improvement and upgrading of bedrooms.
Some years ago a new fund was established with a limit of £4.75 million for development works of a capital nature other than accommodation which in the opinion of Bord Fáilte would promote the development of tourist traffic. The board's plan set out proposals for capital spending which included joint development with bodies such as the Office of Public Works, and the Forest and Wildlife Service, on conservation, recreational and educational projects as well as expenditure to encourage the improvement of facilities by those directly involved with sailing and water sports, horse riding, horsedrawn caravans, sea angling, swimming pools, recreational projects and similar activities and facilities. Works have been undertaken in close co-operation with the regional tourism organisations, local authorities and other interested parties in this ongoing process which meets present and future needs of tourists.
I attach great importance to work of this kind. No country can rely solely on its scenery and other inherent attractions for success in tourism. Growth will depend on continuing to attract an increasingly sophisticated ethnic tourist, and the non-ethnic visitor who expects a range of facilities which would be normal elsewhere. All of the visitor products created by Bord Fáilte spending contribute to the stock of facilities available for visitors and residents alike and are a positive aid in generating new business and attracting repeat business. Many are not directly revenue producing while others have a highly commercial content but because of seasonality and other risk factors, the long developmental period and high capital cost involved, would have developed more slowly without the incentives Bord Fáilte are enabled to give.
The proposed increase in the present statutory limit from £4.75 million to £10 million guarantees the contribution by Bord Fáilte to the process of providing facilities of the right kind in the right place. Bord Fáilte, the regional tourism organisations, the local authorities and other State agencies such as the OPW and Forest and Wildlife Service are all doing an excellent job of work in this area.
Tourism is a major earner of foreign currency. It contributes largely to our balance of payments. The import content is lower than for other sectors and, since it is a labour intensive industry, the job creation potential is greater. Most important of all its benefits are widely dispersed throughout the country so that it is an excellent aid to regional development. The proposals for tourism I have announced denote a strong vote of confidence in the future of the tourist industry as well as a clear acknowledgment of the part tourism plays in the economy of the country. As a further statement of Government confidence another Bill is in progress to provide moneys to enable the B & I to finance an additional passenger car-ferry for delivery for the 1981 season.
The extra funds which we have been making available for tourism promotion over the past two years have been paying dividends and have enabled Bord Fáilte to campaign more vigorously in existing markets and also to begin to explore new market areas. By the end of last year we had again built up to the levels of our previous highest tourism year, 1969, and were set out to share in continued tourism growth. Tourism in Ireland has, however, experienced special difficulties this year indeed, some of the problems are worldwide. The effects of the postal dispute were seriously compounded by the oil shortfall which existed for a period but it is difficult to get a sound assessment of the overall position. The picture that emerges is that while carryings to Ireland were up earlier in the year overall expectations of carryings were down on the target for 1979. The carriers, particularly the sea carriers, planned for substantial increases on 1978 capacity. While these schedules have not yet been fully implemented we still have the same level of services to Ireland as we had in our record breaking year of 1978. The review of projections for the year would be a difficult exercise particularly since the bulk of the season is yet to come and conditions are now improving. Bord Fáilte have moreover mounted vigorous promotional efforts at home and abroad — where I have, personally, taken an active part — and these factors combined may produce the turnaround we need. The board's present hope is that we may at best equal the 1978 performance, which was an all time record. My personal belief is that after a pause this year we will be ready to move forward again at or near growth rates previously forecast.
We have, of course, vigorously tackled the petroleum oil problem in the tourist interest. The first pressures on tourism were on the use of diesel oil used for coaches and cooking-heating in hotels. Very early on, the Government declared tourism one of the priority areas and the difficulties with diesel largely faded for tourism. Following the onset of the petrol difficulties Bord Fáilte and my Department were very active in seeking to ensure that the quota of fuel used by tourists, and on which part of our 1979 allocations are being based, would in fact be available for tourists. The result was the voucher scheme to ensure minimum supplies for visitors, which I believe to be unique and which operates as an assurance for visitors that their needs will be catered for in Ireland.
The scheme must be seen in perspective. Tourism is an essential industry on which over 100,000 jobs depend, not to mention the other very tangible benefits. It is also a service industry dealing in a very perishable commodity which cannot be stored or left on a shelf until the customer is ready to collect it. The motoring holiday has grown so enormously in popularity and is such an important means of spreading the benefits of tourism around the country that the Government were happy to make this positive response to the needs of the industry. I have also arranged with Bord Fáilte to implement a scheme to assure Northern Ireland motoring tourists a minimum supply of petrol while they are on holiday here. I think all will agree that the steps we have taken on the petrol front to protect the tourist industry have been a great reassurance to tourists and were both necessary and worthwhile. I hope the industrial action in the sector will soon be settled.
Meanwhile, the general basic fuel position continues to stabilise and if everybody uses energy sensibly and sparingly there will be sufficient for all sectors of industry including, of course, the very important home holiday market. As Deputies are aware, a major energy conservation campaign has been launched throughout the country and I am pleased to mention that Bord Fáilte and the tourist industry are complementing this through the establishment of an energy conservation committee within the tourist industry.
All in all, therefore, the position is that Bord Fáilte hope that it may yet be possible to approach or match the all time record achieved last year. Despite the temporary setbacks which we are experiencing this year and which I hope will resolve themselves fairly quickly, the underlying trend in tourism is inexorably upwards and the mood is one of confidence in the long-term growth prospects. I hope the industry will recognise the emphatic declaration of the Government's confidence represented by this measure which involves making available an incentive scheme for new rooms for the first time in many years. The scheme will not do the job by itself. We have to plan and work for growth and, above all, ensure that we have the necessary basic infrastructural requirements.
This is what we are aiming to do with this Bill, which I now commend to the House.