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Seanad Éireann debate -
Wednesday, 13 Nov 2002

Vol. 170 No. 12

Tourism Industry: Statements (Resumed).

I thank the Minister for Arts, Sport and Tourism for coming into the House this morning and I thank also the Minister of State, Deputy Michael Ahern.

I welcome this debate on tourism, the importance of which to this country should never be underestimated. It is not always given the weight it deserves but there are strong facts to justify the Government's putting such a strong emphasis on building and expanding our tourism industry. According to the latest statistics from the Department of Arts, Sport and Tourism, the industry generates €4 billion in annual foreign earnings and another €1.2 billion in domestic expenditure. Approximately 150,000 people are employed in the tourism industry. Six million people visited this country in 2001, a figure which has doubled over the past ten years. Those six million visitors, along with the many Irish people who choose to spend their holidays here, contributed an estimated €1.2 billion in income tax receipts. In this time of belt-tightening, that figure should not be dismissed lightly.

When all these factors are considered, it should be obvious that the way forward is to develop and expand the tourism industry, but unfortunately the opposite is more likely to happen in the short term. Tourism is currently on the decline. Hopefully, this development is only a temporary blip on our fine record of growth in this sector but we need to examine the cause of the blip.

It will not come as any surprise that the aftermath of 11 September and foot and mouth disease have played a large part in the reversal of our fortunes in the tourism industry but, as the Minister will no doubt testify, a number of other issues have hurt the industry also. With the advent of the euro it has become far easier for visitors to this country to compare prices with other destinations and, as matters stand, we are not coming off too well under that comparison. There needs to be an increased emphasis on delivering value for money, competitiveness, a high quality of service and a unique experience for the international visitor.

Off all those factors, the issue of competitiveness is probably the most important as we need to show tourists that they are not being charged more here than they would be for a similar service in an alternative destination. The recent Irish Tourist Industry Confederation report, The Need for a Future Development Strategy, points out that as tourism grows, it generates an expansion in employment and an increase in spending and taxes. The report also points out that tourism is an important element in regional development.

I mention the report because it stresses the damage a loss of competitiveness will inflict on the industry. The Minister reiterated that fact and pointed out on a number of occasions the importance of keeping down costs. Many steps must be taken to achieve competitiveness. Irish businesses in the industry must economise and learn to get the maximum output from the services they provide without diminishing their quality. They must also push down prices.

There is a large block, however, on the road to businesses in the tourism industry lowering their prices, that is, insurance cover. Insurance is not an optional extra for people who operate in tourism. They cannot open a business without it and while it goes without saying that insurance costs are not the only reason for our relative lack of competitiveness, it appears clear that the price of premiums is a significant factor. All sectors of the industry are concerned about the cost of insurance and the level of concern appears to be increasing with each passing year. The problem is not helped by the fact that in a large proportion of cases the increase in premiums has not appeared warranted.

Tourism has developed rapidly over the past ten years. We had a thriving industry in the 1960s and 1970s as the tourism market was accommodation led, but the industry fell on difficult times and became stagnant. The problem had become so severe that research carried out abroad indicated that Ireland was looked upon as a green desert, in other words, a country with beautiful green scenery but in which there was very little to do. For this reason, the tourism market decided to change tack and opt for a more activity driven approach. More facilities were developed to provide a whole range of activities for tourists. As more of these facilities opened, tourists began to flow back into the country, with the industry subsequently experiencing ten years of unprecedented growth.

When one takes that fact into consideration, it is clear that the expansion into leisure and other activities is vitally important to tourism, yet these businesses are being hit hardest by the increase in insurance costs. I am aware of one adventure centre in County Louth whose insurance costs increased by 243% last year. That resulted in a premium of €50,000 for a centre that is by no means large and which does not have any significant claim.

Another centre nearby was quoted an annual premium of €274,000. This centre would need to earn that sum before it even began to pay the rest of its expenses, let alone make a profit. Is it any wonder we have difficulty in being competitive? The centre eventually managed to negotiate the insurance company down to a premium of €100,000 and a loading of €25,000 for every additional claim. There can be little economic sense in having insurance when every claim will cost the centre approximately €25,000. It might be claimed that insurance costs were always that high, but only two years ago the same centre was paying the equivalent of €65,000 per annum. That increase in cost indicates the damage being done to the level of competitiveness in the tourism industry.

It is not just the more energetic aspects of the industry that are being affected by spiralling insurance costs. This year alone, the cost of insurance for bed and breakfast establishments rose by one-third. In a number of cases where minor expansion work was carried out, the increase was as much as 70%. I am aware of an establishment in Kerry whose premium increased by 130%. The effect of these increases is that bed and breakfast establishments in rural settings with three to five bedrooms are now paying premiums of €1,500 to €2,000 per year. That is an imposition on these establishments when we consider their relatively isolated location, the small markets available to them and, in some cases, the limited tourist season in which they have to operate. Such a figure is a large amount of their annual turnover and is clearly an inhibiting factor that results in preventing a more balanced spread of tourism.

I urge the Minister to instruct the Department to examine the issue of insurance cover in the tourism industry. It is not beyond his means to have the Department or a statutory body under his control carry out an investigation into the effect of insurance costs on the industry and the means we can take to reverse the detrimental trend of increased prices. I know the Minister will take this suggestion on board and I thank him for that.

I welcome the Minister of State to the Seanad. I also take the opportunity to welcome the Egyptian Minister for Health and his party to the House. It is appropriate that they are here today for this debate on tourism. I hope they enjoy their visit to Ireland.

Our tourism industry is suffering because of a number of events which occurred in the past 12 months. The foot and mouth disease crisis and 11 September have had a knock-on effect on tourism, which is hugely important for this country. It generates €4 billion in foreign revenue and supports 150,000 jobs. It is vitally important that we do everything possible to support it. Although the industry is suffering currently, initiatives can be taken which would support it.

This is an industry which we have to sell. We do not have fine weather to attract tourists here but we have many other qualities which we need to sell abroad to encourage people to visit our country and enjoy its many attractions. That was brought home to me during the Seanad election campaign when I travelled the length and breadth of the country and visited many wonderful villages and saw the pride people take in them. The warmth and hospitality of our people are second to none but it is difficult to sell these qualities to foreigners and encourage them to visit rural areas. Unfortunately, not too many tourists travel outside Dublin and we must tackle that.

Dublin and a few other cities have become popular destinations for stag nights and, while we welcome tourist revenues, we must keep an eye on such activities. Temple Bar is a wonderful area but it is not a place where I would want to be after midnight because it is not safe. I know this well because my son was attacked there. Many tourists are attacked there also. We must provide for the security and safety of tourists, and we have been lacking in that respect. It is bad enough for anyone to be attacked but it is somehow worse when it happens to someone who has chosen to visit our country of a hundred thousand welcomes or céad míle fáilte. Robbery, minor and more serious attacks should come within the tourism brief, in consultation with the Garda Síochána, in an effort to provide security for visitors. The Temple Bar area needs to be examined seriously in that regard.

We must offer value for money, a major topic of conversation among visitors because Ireland has become an expensive destination. Not so many years ago we were talking incredulously about the cost of a coffee or a Coca-Cola in Paris, but it is now equally expensive to buy a coffee and a biscuit here. Inflation has hit restaurant and bar prices, and insurance costs have also affected the tourism sector.

Dublin needs to have a major conference centre. I was disappointed by the wording used by the Minister, Deputy O'Donoghue, who mentioned the provision of such a centre. He said he was examining the case for the construction of a national conference centre and the active promotion of conference business. I thought, however, that the case for the construction of a national conference centre had been examined some years ago and it had been decided that there was a positive need for such a centre in Dublin. I am aware of the problems we had at that time in trying to decide on a location and we lost EU funding for that conference centre because of that dithering. Such a centre would now constitute a cost to the State but we still do not have it and, therefore, I am extremely concerned about the Minister's choice of words. We are losing out on business due to the lack of such a centre, despite the fact that 113,000 people have come here to attend conferences, a 200% increase on the 1993 figures. Just think what we could do if we had a conference centre that could accommodate far larger numbers than at present.

A national conference centre should be located in Dublin city centre. We have all attended conferences abroad where we enjoy the experience of exploring the host city, rather than being miles outside it. A city centre conference facility in Dublin would encourage visitors to spend their money here. The Minister of State should use her influence to ensure that such a centre will be a priority.

I take issue with what Senator Daly said because I am pleased there is a price war between Aer Lingus and Ryanair. That is what competition is about – it is good for customers and the businesses involved. Aer Lingus is making a profit at last due to competition. For far too long there was no competitor on its heels so Aer Lingus could charge what it liked, and it did. That affected tourist numbers. Some years ago, one of the biggest factors preventing people from coming here was the cost of flights, although it is no longer an issue. Visitors can now visit the country more cheaply and we must see to it that air travel remains inexpensive.

I do not share Senator Daly's concern that low price trends will affect the viability of airlines such as Aer Lingus or Ryanair. Mr. Michael O'Leary, the chief executive of Ryanair, is a businessman who would not offer cheap fares unless he knew it was profitable to do so. The fact that he is making a profit proves the point that this is no gimmick. Competition is good and I hope Aer Lingus will continue to improve as a result, as it is currently demonstrating.

Because road traffic is now so bad in Dublin – and it is just as bad in Cork – it is essential to have a rail link from the city centre to Dublin Airport. It is a nightmare for visitors to make that short journey, which can now take so long to complete. A rail line to the airport must be provided as quickly as possible if we want to attract more visitors. People are sophisticated and there has been an improvement in the delivery of services. We should provide tourists with the best facilities from the time they arrive at the airport until they make their journey home and in this respect such a rail link will be extremely important.

The special Olympics next year will provide a wonderful opportunity for us to showcase the country. We should use that event to sell Ireland in whatever way we can, as well as ensuring that those attending the games will enjoy themselves and will want return. The special Olympics will enable us to sell Ireland as a good tourist destination.

I welcome the Minister of State for this important debate. I also thank the Minister for his important speech which outlined the current state of the tourism sector, as well as its future prospects. I welcome the review of tourism policy which the Minister announced last week. Such a review is timely, given the economic growth of the past ten years and the fact that we now find ourselves at a crossroads with some decline in evidence. The forthcoming review requires the greatest level of input concerning policy. Without that, we will not have a period of sustained growth as in the past. It is important that we bring together the different elements of the tourism sector to a point where we will go forward with a policy that will help to improve the whole tourism sector.

As has already been mentioned, this country had ten years of successive growth in the tourism industry until 2001, when we experienced a drop in tourist numbers of between 5% to 10%. This decline has been explained by a number of factors. My colleagues have mentioned them and the Minister alluded to them in his speech. The foot and mouth disease crisis was certainly one factor from which all areas suffered, particularly as it affected tourists from European and from Britain, one of our biggest areas for inward tourism.

September 11 had a big effect on our tourism, but it may have been overplayed in some areas and in some industries, particularly in the aviation sector about which I will talk later. It was not as big an issue with the American tourists as it was with some of their airlines.

While it is clear that the industry throughout the country is suffering, it may surprise Members to learn that some areas are being affected more than others. I am glad that the Minister of State, Deputy de Valera, is here. Coming from County Clare as I do, she will be very familiar with the fact that in 2001 overseas tourist revenue in the eastern region, which consists of Dublin, the midlands, the east and the south-east, actually increased by over 25%. In contrast, the western region, which consists of the north-west, the west, the south-west and the mid-west, including the Shannon region, recorded a drop in overseas tourist revenue of some 4%. This contrast in numbers is certainly something which needs to feed into the tourism review being undertaken by the Minister. He needs to put in place the necessary mechanism to address this because we all talk about balanced regional development and the tourism sector is one area which plays a key role in that regard in terms of inward investment into those regions. If we succeed in putting in place the measures that will allow for a greater influx of tourists into those particular regions along the western corridor to which I referred, it will assist in the future development of those regions.

This loss of overseas revenue was partially offset by a strong increase in home holiday business in the western regions but were it not for this fact, the area would have suffered a large number of job losses as a result of the downturn in business. We cannot have any more job losses in the western region. With the difficult economic position, there is obviously a likelihood of such losses but it is important that anything that can be done at this stage is done to assist us.

This year the industry continues to experience a number of difficulties. Added to the hurdles I have already mentioned, there are a number of other problems that the industry must face and I will outline those for the House. The slowdown in the economies of some of our key markets such as America, Germany and France will certainly influence the influx of tourism from those areas. There is a downturn in access capacity – which I have already mentioned and will deal with in greater detail – primarily into the western regions and particularly on the transatlantic routes.

Although I was not here earlier, I listened on the monitor to a number of Senators who paid particular attention to the difficulties on the transatlantic route. There is a continuing downturn in the North American economy and in the business interests between our two countries and that obviously has a knock-on effect on tourism. There is an important area of tourism which is often not recognised, that is, the business-tourism sector; these are the visitors who come here to do business and then stay on for two to three days or bring members of their family with them. Often that tourism is not necessarily seen as part of the package holiday or bus tour sectors, but the fact that there is not the same level of business travel between our two countries has certainly contributed to the drop in numbers.

Other relevant factors are the perceived value of a holiday in Ireland, especially in comparison to our competition, and the increased marketing spend to our competitor destinations, for example, the vast amount of money that the British Government has pumped into its "Visit Britain" campaign in comparison to our marketing spend and of course the effectiveness of that spend. I compliment the Minister for the remedial action he took on being appointed Minister for Arts, Sports and Tourism. Earlier he spoke about this in terms of the provision of €3 million for front-line marketing. That is hugely important but there is a need to go a little deeper in terms not only of the allocation of funding but of how that money is spent. He pointed out in his address that the money was spent in areas from where we had the best chance of getting tourists. He also pointed out that he had not necessarily targeted the North American market during the summer months because we had reached an effective capacity in that area but that there is a need to look at areas of the American market in the autumn period and then at other times to target some of our nearest neighbours, both in Britain and in the other parts of Europe. That is an area which is often under-utilised.

Senator Phelan spoke about the Shannon waterways. I come from a little village in County Clare called Mount Shannon, which sits on Lough Derg on the River Shannon. It has a nice little harbour and it certainly does quite well from the tourism sector and the boating sector of hired craft which are travelling the waterways. The advent of the Shannon-Erne link has created a much greater capacity for tourism in that particular sector. The Minister of State, Deputy de Valera, is well aware of this and paid particular attention to that while she was in the previous Department, setting up that North-South body and being actively involved in it. I want to recognise her involvement and thank her for that, including the placing of an office of the North-South waterways body in the nearby village of Scariff. That is certainly an area which has been underdeveloped in my view. Some of the facilities are underdeveloped. There is probably greater capacity in that area in terms of the number of boats that are on the River Shannon provided through the hire companies. In the past there were some good EU grants which were beneficial. We now have capacity in terms of boats but we need to look to the further development of facilities, both on the river and in the villages and towns that sit on the River Shannon.

These are just some of the issues that the tourism industry faces this year, but it is also worth pointing out that the western regions are most likely to be negatively affected. On top of all the reasons which I have already set forth, the issue of limited direct air access is another factor which must be considered. For example, this year Shannon Airport has lost a number of scheduled air services from the United States, from Europe and from Britain. In total, there has been a net loss of as many as 6,000 seats per week in the high season. How can the tourism industry be expected to thrive in an area when the target markets continue to decline? It was brought home starkly to me last week when I was the guest of the US Business Council for Commerce and Economics at a dinner in New York and met with a number of tour operators and a number of people from Tourism Ireland. They were quick to point out to me that there is a shortage of access to Ireland on the transatlantic route. That is a particular concern.

I will try to tie in a point Senator Terry made regarding the contribution of my colleague, Senator Daly. Competition is important in all sectors but in the airline sector there is a level of undercutting on some routes. My concern would be that if there was a price war over a prolonged period of time, one or other of the competitors would no longer service particular routes and these would become unviable. This is the point Senator Terry is probably missing. When you get to a point where it is not viable for one competitor, that company pulls out of the market. She has identified Michael O'Leary as a good businessman, and no doubt he is, but when somebody pulls out of the market you leave it open to the vagaries of the one or two who are left. That is where there is no longer competition and where it has an effect on the potential future of reasonably priced air fares. At times we have seen air fares reach a point where it is almost ludicrous. In some cases the tax is greater than the cost of the flight. That is not a real position and we must be very careful about that.

I thank you, a Chathaoirligh, for allowing me the opportunity to make these points.

I also welcome the Minister of State, Deputy de Valera, to the House. She comes from one of the tourism honey pots and therefore I am sure she is tuned into the many issues relating to tourism and the problems we have encountered in the development of the industry. Tourism is a most important industry and has been a success story in terms of job creation and economic growth. All this has happened as a result of the good planning and foundations laid by Deputy Enda Kenny when Minister with responsibility for tourism. He introduced imaginative schemes which developed many of our tourism honey pots and resorts. Tourism has huge potential for future job creation and economic benefits provided we have a sound strategy backed by relentless co-operation and effort by the Government and all concerned with the business.

Developing tourism is not simple, especially after the foot and mouth crisis and the events of 11 September last year. Much effort is needed as well as linkage with other economic sectors, national agencies, public and private sector organisations, voluntary bodies and community groupings. Local authorities have taken a more proactive role in local tourism development through the provision of roads, better signposting, access to amenities and so on. All this should be welcomed. There is a greater role for local authorities, particularly for county tourism committees. This should be looked at in depth in the future.

Future growth or even the maintenance of our current position will not come easily. This is no time for the Government to stand aside and let things work for us. It is a time for the Government and the private sector to increase co-operation in order to protect and enhance this important industry in the national interest. Tourism has been a huge benefit to the Exchequer in recent years. Ten years ago approximately 88,000 job equivalents were attributed to it. Today, as the Minister said, this figure has increased to approximately 150,000 jobs. What a tremendous base on which to build the future of this great industry.

Travel is perceived as a luxury and may be the first sector to suffer in an economic decline. We do not want to see cutbacks in the advertising of Ireland abroad. This must be pursued with vigour. If one has a product, one must sell it. We must sell our tourism product more vigorously than we are doing throughout Europe and America, particularly in the EU applicant countries. We must continue to promote Ireland and encourage overseas tourists to our land because they generate huge earnings for the economy.

We must continue to develop this very important industry. We need greater co-operation between Government and industry and must encourage the private sector to invest and take risks to develop the industry. We must improve on a number of areas to provide an attractive product. Hotel infrastructure, facilities and services must be improved. We must provide service in European and Asian languages. The provision of casinos, which people like to visit when they are abroad, must be investigated. We must develop more golf courses and all forms of water sports. Fishing villages and our inland waterways, which have been neglected for far too long, are also important. As someone who comes from a midland county, I am particularly concerned about the canal system. Much has been done, but there have been delays in recent months in the completion of the navigation system to the Shannon.

It is important that we support the county tourism committees which are in tune with the issues on the ground and in constant contact with development associations, village renewal committes and other local bodies which are important contributors to the development of tourism. We must examine the costs of the industry. Insurance costs could price suppliers out of the tourism market.

On the road network, the provision of lay-bys is important. Farmers must be encouraged to cut hedges and clean up the countryside in order that people can see the tourism product. The importance of signposting has already been mentioned.

We must provide for special interest tourism, such as eco-tourism. Regional tourism organisations must be reorganised. I come from the midlands and I am part of the midlands east tourism organisation. However, my area has very little in common with counties such as Wicklow, Kildare and Kilkenny and always comes at the bottom of the list when funding is being distributed. County Longford is part of the west and inappropriately placed in the Midlands Health Board region and the midlands east tourism organisation. The regional tourism organisations must be realigned. Counties Longford, Westmeath, Cavan and Roscommon could be included in a regional tourism organisation in order that the products in those counties could be marketed properly.

Other Members have referred to the importance of transport and accessibility to Dublin Airport. We should examine the possibility of an airport in the midlands in order that tourists could be brought there without having to go through the traffic congestion of the capital city. Not far from where I live in Abbeyshrule, we have one of the longest running rural airports which was established in 1952 and where is much activity. The Ministers for Arts, Sport and Tourism, Transport and Environment and Local Government should examine the possibility of developing a midlands airport to allow carriers to come directly to the centre of the country. Much needs to be done to develop the Shannon region. Infrastructural development is needed to provide accessiblity to the midlands. There is no better way to do this than by providing direct air transport to the region.

We have developed a national corporate culture and an awareness of tourism. It is important that each citizen contributes to making it work by ensuring tourists are treated with genuine warmth, friendliness, welcome and hospitality. Corporate awareness is the base on which the industry is built. Tourism will only work for us if we make it happen. If we watch others do it or ask what others have done, we will lose out to our competitors. Our potential clients are increasingly sophisticated and demanding. We need to work hard to keep our share of the market.

It is important that we do not simply promote tourism because of the resultant economic benefits. We should do so for a far more important and broader reason. Tourism will only flourish in a peaceful and just society. It has a major role to play in bringing people together and giving them a better understanding of each other's culture. We have a fine and healthy culture in this country and a facility with people. It is up to the Government to ensure the proper infrastructure is in place for the development of tourism and to make it work.

Tourism has been one of the great success stories of the past 15 years. In 1986 there were 2 million visitors to the country. Today there are about 6 million annually. Tourism is a key industry for all developed countries, whether large or small. Reference has been made to the importance of home holidays. French people or Americans, who come from much larger countries than Ireland, spend a lot of time at home, but so do Scottish people who have a land area roughly the same as ours. If one has an attractive and fascinating country, at least some of one's holiday should be spent at home, particularly in the summer months when the country is at its most attractive and when some alternative destinations are very hot and crowded.

The tourism industry suffered two blows in 2001, first the foot and mouth outbreak and then the events of 11 September. I am glad to see there are signs of recovery.

Access is absolutely vital. There are two things in particular worthy of mention in this regard. The operations of Ryanair in the past 15 years have made an enormous contribution to extra numbers coming into the country. Also, important emphasis is being placed on the transatlantic link. I travelled from Shannon a couple of times in the past few weeks and the aircraft were full. I am glad to see that the Baltimore route will be reinstated and that Air Canada, after a stand-off of many years, is starting up here. There is a broader range of European destinations. I hope it will be possible in the long term to have links as far afield as Japan and Australia.

We have had some discussion in the House about rail links, which are particularly important in the summer months. Some foreign visitors, particularly younger ones but not exclusively so, like to travel around the country by rail. It is important that we do not cut the connections to Rosslare. I am glad the Minister for Transport is giving the highest priority to establishing a rail link from the airport because that is vital. It is an area regarding which we do not compete well with other major airports.

My following point may be different from what one hears. I was impressed on the Seanad campaign when I arrived at destinations late at night, when one could lodge only in a hotel as bed and breakfasts were closed at midnight or afterwards, that the real price of accommodation has levelled off and has perhaps even gone down compared to what it was a few years ago. This has to do with the increase in supply, which I welcome.

I hate the phrase "tourism product". It is so cold, impersonal and unwelcoming. Let me substitute the words "activities" and "attractions". In terms of activity holidays, we have done a lot. There are many golf courses, marinas and so on which are attractive to people. Admittedly, we do not yet have a stadium, which would obviously help.

Equal importance should be attached to culture and heritage because to many visitors, not necessarily the younger ones, these are things they like, particularly if the weather is uncertain. I was very glad to see the extension of the National Gallery of Ireland in Dublin because it has upgraded it to a different level. Many other centres have opened or have been refurbished around the country and the Government should do what it can to help them stay open. Some have received aid and assistance. I know the importance, for example, of the Excel Heritage Centre in Tipperary, which has been open for a couple of years and which I am glad to say is beginning to find its feet financially.

My county is full of famous heritage attractions, including the Rock of Cashel, Holycross Abbey, Cahir Castle and Swiss Cottage. The War House has just been opened this year, otherwise known as the Widow McCormack's Cottage. Also included are Ormonde Castle and the Mitchelstown caves, not to mention Senator Ó Murchú's Brú Ború Cultural Centre in Cashel. I am a trustee of a small gem of a tourist attraction, the Bolton Library in Cashel, where there are antiquarian books dating back to the fifteenth century from all European countries.

There sometimes needs to be better co-ordination, particularly within a given town, in respect of pointing out the other attractions in that town, whether or not they are in State ownership. Some of us feel that in particular regions – Senator Bannon referred earlier to the midlands – the regional organisations should promote the attractions of the different parts equally.

I welcome the establishment of Tourism Ireland. The success of tourism in Northern Ireland depends on peace and stability. It is extraordinary that what would normally be the peak season in July is marked by disputed Orange marches and an exodus from the area rather than an influx. In a context where people are discussing the Quigley report on marches, it is fundamental for the tourism industry that marches, when held outside the areas where they are fully welcome, be conducted with consent and agreement. One will always have trouble until that principle is accepted. It is more or less accepted in Derry but I wish it were accepted elsewhere.

Every autumn one reads about the millions of pounds that the marching season has cost industry, the security forces and so on. Tourism is a bit underdeveloped in Northern Ireland, yet it has its fair share of attractions compared with the rest of the country. It is a pity to see it not better developed. If Orange marches could be turned into a tourist attraction as opposed to a tourist turn-off, much better work would be done. That would also have a significant benefit for bordering counties in the north-west.

I welcome the Minister, Deputy O'Donoghue, to the House and wish him well in his new portfolio. It is ironic that he has come from a portfolio requiring zero tolerance to one where considerable tolerance will be required.

I understand that the Minister was at the World Tourism Conference in London yesterday. It is important that we be represented at conferences such as that, especially as it was held in the UK, which is still our major market in so far as tourism in concerned. Marketing in the UK is the key to the development of tourism in this country.

Like Senator Mansergh, I welcome the fact that Tourism Ireland has been set up and is marketing the island on an all-Ireland basis. It is very positive to the development of the Good Friday Agreement. It is also opportune that it coincides with the merger between Bord Fáilte and CERT, which brings together two of the major players in the tourism sector.

The tourism sector is very fragmented and requires much greater cohesion. Dúchas, the Leader programme and regional tourism organisations distribute funds which, while welcome, need to be better co-ordinated. According to those involved in the industry, the duplication of work has resulted in a waste of public funds. For example, the various tourism bodies have produced large quantities of duplicate brochures which the market does not have the capacity to distribute. There is a need for a central vision and cohesion in the tourism sector. I call on the Minister to take this opportunity to produce a programme that will benefit the industry. I also hope he will bring together all the organisations involved.

Signage still presents a major difficulty for the tourism sector. Any Senators who depended on the signage in the country to help in their campaigns for election to this House would not have done well. The problem is not being addressed in a cohesive and structured manner. I call on the Minister to deal positively with this aspect.

I welcome the Minister of State, Deputy Brian Lenihan, who is a man of immense talent. I wish him well in his ministry. I also thank the Minister, Deputy O'Donoghue, for attending the earlier part of the debate and congratulate him on his appointment and excellent work as Minister for Justice, Equality and Law Reform.

Tourism is an extraordinary business which has major implications for this country. The industry generates approximately €4 billion in annual foreign earnings and €1.2 billion in domestic expenditure. Some 150,000 are employed directly in the industry and many more are associated with it. The industry makes an enormous contribution to the economy. We must ensure this is maintained and supported.

I thank the Minister for visiting the United States and putting the case to the Americans to return to Ireland. The year 2001 was difficult, especially for the people of the United States, including those in New York who suffered from the events of 11 September. No industry can take precedence over what happened and the only appropriate response is to express the deepest regret to those who suffered. The foot and mouth disease outbreak was a major setback in Ireland. The Minister, the former Minister of State, Deputy Davern, the IFA, farmers and others worked hard to ensure the outbreak in County Louth did not spread.

Developments in Northern Ireland have been most helpful. I thank Senator Mansergh for his extraordinary work on behalf of the people. It is a fitting tribute to him that he is now a Member of this House and can contribute in many ways to outstanding matters. It is very important to ensure the situation in the aftermath of the Good Friday Agreement does not deteriorate. Those of us who have travelled abroad on behalf of Ireland incorporate will be aware that people will not travel to troubled regions. For example, there has been a major reduction in the numbers of tourists visiting the Basque country in Spain.

There has been a period of tremendous peace in Northern Ireland – I have travelled there since the Agreement – and it is now a wonderful area for tourism. We must ensure a united approach north and south of the Border. In the past it was always a disadvantage to have two separate tourism organisations fighting over the one market. Now we are united in encouraging tourists.

The Nice treaty referendum gave Ireland tremendous coverage, especially when we voted "Yes" and a céad míle fáilte to the people in the applicant countries. It is important that they will be attracted to visiting Ireland on the basis that they have been wholeheartedly welcomed to join the European Union by the Irish people in the recent referendum, when they were given the opportunity to assess what was involved. Many applicant states do not have great tourism potential in terms of attracting visitors from Ireland, but many in those countries would like to visit Ireland and perhaps express their thanks to us for our contribution to them.

The former President, Mary Robinson, referred to the Irish diaspora, which in the United States amounts to 40 million people. The Department should relaunch the return home to Ireland campaign, first initiated by the former Tánaiste, John Wilson. We should all be given welcome cards to send to our relations, whether we want them, because it would be good for Ireland.

Perhaps they should be sent St. Patrick's Day cards.

Or any other day. They want cheap access and a quality tourism product, especially in the off-season. There is a tremendous genealogy industry in the United States. For example, the Lenihan, O'Donoghue and Cummins clans could launch a major tour of Ireland. It is remarkable the numbers who travel here under that heading. Iarnród Éireann and Bus Éireann are involved in such campaigns. I would encourage the development of this kind of tourism.

We owe a debt of gratitude to Michael O'Leary, the head of Ryanair, and the Ryan family who established the company. They showed beyond doubt that fare reductions increase the volume of traffic to Ireland. I doubt if any one person or company have done more for Ireland.

Senator Daly would not agree with the Senator.

If Aer Lingus had been left without competition, it would today cost approximately €400 to travel to London whereas now it can be done for approximately €19. Aer Lingus is a great company, but all the trimmings have been removed. It is now a get on, get off airline, which is fine as travellers get to their destination on time and in safety. I compliment Michael O'Leary. Despite his statements and small faults he has done good work.

Baldonnel Airport should be developed, at least for short hop and regional flights and flights to Europe. I have visited the airport on a number of occasions and while it will not become an international airport, it has great potential which should be realised. A new airport for the midlands should be considered. There is a huge amount of available land in cutaway bogs. An airport serving Athlone and the surrounding region could be built to cater for future needs. Tourist numbers to this country have doubled and trebled over the past 12 years. There is a need to develop this.

Britain's failure to join the euro is a disadvantage to tourism, although it means that costs here are more competitive. The competitive advantage enjoyed by other countries in the eurozone is levelling out. For example, the advantages enjoyed by Greece and Spain are being reduced. This will also happen in the case of Cyprus if it joins the European Union. The euro has created a level playing pitch. The costs there are less than here which is an important consideration.

We should encourage more European tourists to come here. Swedish people have an enormous interest in Ireland. Bogs have a particular attraction for them and they love to walk on an Irish bog. I have been involved with a Swedish group which brings people to seminars here. I am aware that there has been an attempt by Bord Fáilte to bring groups here for that purpose. County council seminars are very attractive to them, particularly in the off-season.

We have many attractions in County Roscommon. I urge that Knock Airport be supported. It has tremendous development potential as far as regional tourism is concerned. Killarney, Cork and Dublin are getting priority attention but areas such as Roscommon in the hidden Ireland have untapped resources. Sligo, Roscommon and Longford are ripe for the development of boating, fishing and other leisure pursuits.

Overall, there is not enough accommodation coming on stream. In Roscommon we are fortunate in that a major investment has taken place in the Abbey and Royal hotels. The Abbey Hotel is developing a major leisure complex. The Hodson Bay Hotel in south Roscommon is also a major boost to the area. We need more investment in hotel rooms and bed and breakfast accommodation. Grants were paid in the past but they are no longer available. If we do not have the beds we cannot have the tourists. In spite of whatever cutbacks may arise in the budget, I urge the Minister to continue the investment of European funds in the development of leisure facilities and bed capacity.

I welcome the Minister of State, Deputy Lenihan, to the House and wish him well. I also extend my best wishes in his new portfolio to the Minister for Arts, Sport and Tourism, Deputy O'Donoghue. It is not an easy area of responsibility at the moment because the tourism industry is under such pressure.

I agree with Senator Leyden that the price war between Aer Lingus and Ryanair has resulted in cheaper fares for travellers. I acknowledge Senator Daly's point that, in the long term, that may not be for the best as one may price the other out of business. For now the price war is good for both airlines as it increases demand and competitiveness and attracts more people to travel both to and from here. I concur with Senator Leyden that Ryanair did great service to the country because were it not for it the vast majority of people would not be able to leave these shores. Fifteen years ago it cost £420 to travel from Dublin to London. This was one of the busiest routes in Europe in spite of the cost. The advent of Ryanair forced Aer Lingus to bring down the cost of tickets.

Many concerns have been raised by Members in regard to the tourism industry. The past two years in particular have been very bad. In 2001 there was an outbreak of foot and mouth disease and then the events of September 11 occurred. This year has also been pretty bad for the tourism industry.

I take issue with a particular feature of the tourism industry here. In Dublin one meets worldwide tour operators which are given guidance as to where they should send tourists. Invariably the tourists who arrive in Dublin are taken to the south. It is up to every elected representative to fight for his or her own patch and I will be fighting for my corner in the western region. I make no bones about it, although there are Senators here from the southern region. The vast majority of tour operators go south of a line from Dublin to Galway and the rest of the country plays the role of poor relation. I urge the Minister to give equal treatment to all regions.

The Minister informed us that he has been in the United States promoting Ireland in recent weeks. As one of the many public representatives who has also travelled there, I was struck by the lack of interaction between the different agencies we have sent to work there on our behalf, either to promote trade or tourism. A concerted approach would be of benefit to all concerned.

Many speakers referred to the high costs that are deterring tourists from coming here. There are many reasons for such high costs. It was suggested that we aim our advertising at those who can afford to come here rather than the package tourists. I do not agree with that suggestion; any tourist we can get should be welcomed and we should endeavour to be as competitive as we can.

The Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, has initiated steps to reduce the high costs of insurance. However, not enough has been done and we have seen the effects on bed and breakfasts, hotels, craft shops, bicycle hire and car hire companies. They are all under pressure and see the main problem as the high cost of insurance. Senator Phelan has put down this matter for discussion on the Adjournment tonight. I am in the restaurant business and have seen insurance costs going sky high this year. Public liability in particular has gone through the roof. Every small business is faced with this state of affairs. The Minister should do more in this regard to put pressure on what I believe is a cartel operating in the insurance business.

The BMW region, from where I come, is not getting its fair share of funding. I have sought a debate on this matter on several occasions. I hope the Leader of the House will ensure that time is provided for it in the near future. The country has received substantial funding in recent years on the backs of the people in the BMW region. The Minister for Arts, Sport and Tourism needs to ensure that we get our fair share so that the many tourist projects in the pipeline will not suffer a shortfall in funding in the coming years. The Estimates, due to be published tomorrow, will contain cutbacks. I hope there will be no cutbacks in the BMW region or in proposed tourism projects.

The Minister said:

Coming from Kerry I am conscious that the North American market is particularly important for many sectors of the tourism industry. There were difficulties increasing our marketing returns in this market during the peak season because of reductions in direct air capacity. In view of the high load factors and pricing on the American routes, I did not favour putting extra resources into the US market during the peak period. However, I did consider that it would be worth pursuing some of the traditional autumn business.

We all know there was a downturn in the number of US visitors coming here. The Minister has clearly said that he did not put resources in place in the peak period. That was a retrograde step. Everybody knows that people mainly go on holidays from May to September. After the bad years of 2001 and 2002 it is regrettable that the Minister did not pursue the issue and invest more money during the peak period. That is the best time to have people travel.

The Minister said that we have lost out on the German market. Many German tourists come here for fishing and the season runs from May to October. Why has the German market diminished?

I welcome the Minister to the House for this very important discussion on tourism. The Minister has told us the successes of Irish tourism and the employment it provides. We look at everything in the context of the good figures for 2000, but there were some difficulties last year.

I welcome the additional €3 million for marketing activities which the Minister was able to secure. It is important to identify new markets when difficulties arise in tourism. The Minister used this funding to help stimulate bookings for the remainder of the summer season and the rest of the year. I hope he will be able to secure more money for marketing as it is a key area. The Irish Hotels Federation welcomed the additional funding, which should increase momentum. I hope the hotel industry will use it to best advantage and that more overseas tourists will come to Ireland.

The foot and mouth crisis in 2001 caused great difficulty. One can think of many events, such as the national ploughing championships, that suffered. Ballinasloe is famous for its annual horse fair and festival but that was cancelled last year for the first time ever. I am glad to say a very successful horse fair and festival took place this year. When one sees the effect of the cancellation of a festival on a town and its region one realises the importance of such events to tourism. The Ballinasloe fair and festival attracts people from all over Europe. It is said that Napoleon bought horses in Ballinasloe.

Napoleon had white horses. I thought that only piebalds were sold at Ballinasloe.

An Leas-Chathaoirleach

It was further west.

The standards were even higher in Napoleon's time. I know there is an issue about cruelty to animals but I will not get into that. It is a good fair and is very important to Ballinasloe and surrounding areas.

The Minister said he was in discussion with the Minister for Transport, Deputy Brennan, regarding new air routes. He has also spoken about the proposals for a second, independent terminal at Dublin Airport to cater for up to 30 million passengers annually. It is marvellous to see companies, principally Ryanair, advertising free flights. I have spoken to young people who said they never thought they would see free flights being offered – I thought it was the kind of thing one would win in a competition.

I welcome the reduction in prices we have seen and the introduction of free flights. The only difficulty with free flights and new routes is the question of terminals. That is why it is important the Government should work on this. I know it wants to cater for low fare airlines. I understand the new terminal at Dublin Airport is to be completed in 2004. This is a very important issue when one speaks of choice of airlines and strategic steps to assist tourism. I hope it will result in additional routes. I know Dublin Airport is not within the Minister's remit but something has to be done about it. We are all aware of the large amount of traffic that goes through it.

The Minister referred to the Special Olympics World Summer Games, an event that has seized the imagination of people in small towns throughout the country. An estimated 7,000 athletes, 3,000 coaches and delegates along with 28,000 relatives and friends will travel here next June from 160 countries. The nearest host town to me is Mountbellew, a small town which is to host athletes from Ecuador. Local committee members have taken Spanish lessons to help the athletes settle and I commend them on taking that initiative. Of the 30,000 volunteers needed 15,000 have been recruited. It will require more effort to find the remaining volunteers and I hope the campaigns taking place are successful.

I have written to local authorities in my county and the health board establish if help can be given to athletes. The chief executive officer of the Western Health Board informed me that it would be helping three athletes from County Mayo. I was glad to hear that as it is a very positive step. I hope the same support will be forthcoming from the local authorities. It should be a very special event. I know there is great enthusiasm for it and I hope it will be successful.

I agree with the Leas-Chathaoirleach's comments regarding the BMW region. Objective One status was achieved because the counties involved were classed as disadvantaged. Priority should be given to tourism developments in the region, particularly in the area of coach tours. West Galway has benefited from such business but the north-west has been neglected and this must be rectified. The tourism agencies in the west will try their best to attract coach tours to the region.

I am delighted that Bord Fáilte and CERT will merge to form the national tourism development authority. This will be a positive step in the promotion and development of sustainable tourism facilities. The excellent training provided by CERT and the marketing skills of Bord Fáilte can be combined to form an effective body. We want a return to the excellent growth in tourism of 2000 so that we overcome the obstacles that have presented themselves to achieve sustained growth. Excellent opportunities will be provided through the new airline schedules and reduced air fares and, hopefully, the tourism industry will expand throughout the country and not only in well known tourist havens. The west and north-west must, therefore, be included.

I thank the Minister for his contribution. As he hails from County Kerry, he is well aware of the value of tourism. If people in other counties displayed the same enthusiasm for tourism as the people of County Kerry, we would have a great industry, which would produce better results than in 2000.

I am aware we are approaching the conclusion of the debate so, as Henry VIII said to his wives, "I won't keep you long". I welcome the Minister and thank for him coming to the House. It is appreciated by this side of the House.

I do not know a great deal about the tourism industry but many of my friends are employed in tourism related businesses, which reflects the growth in the industry. No matter how much money is invested in tourism, a return will be generated immediately; therefore, the money will not be wasted. I consulted my friends who are directly involved in the industry earlier and they pointed out that the three key elements in the industry are access, marketing and value for money.

Bord Fáilte conducted a visitors' attitude survey this year which highlighted that the holiday experience of one in three tourists surpassed their expectations. That is good news but another way to look at this finding is to query whether they had a low expectation of Ireland before they visited. That is an area of concern and it must be examined.

Ireland, unfortunately, is still regarded as a high cost destination. For example, food, drink and taxis are expensive and the cost of insurance has had a knock on effect on the price of accommodation, thereby making it more expensive and less attractive to consumers. VAT is charged at a rate of 12% on food and 21% on beverages while excise duty is charged at between €2.45 and €4.95 per drink and these charges have increased the cost of eating out and staying in hotels.

Tourist numbers have reduced significantly this year but following the foot and mouth disease outbreak there was a great reaction on the part of the Irish people to support the tourism industry. However, this year most people have sought to travel abroad, particularly because of the bad weather during the summer. They cannot be blamed for doing so because it is cheaper to fly a few hundred miles to Spain than to say in a hotel in Ireland for a week. There is no point in whingeing and moaning that foreigners are not coming to Ireland because it must be attractive for them to do so.

Aer Lingus needs to reduce its fares. One of the few successes of the Fine Gael led Government in the mid-1980s was to grant Ryanair a licence. That was a tremendous success and the more competition there is in the airline market the better. I agree with Senator Leyden's comments in this regard. Tourism Ireland Limited was established to market Ireland, North and South, and the recent upheaval in Northern Ireland is worrying. People involved in the tourism industry are concerned about how the industry will be affected.

Carlow had a poor record in terms of tourism up to a few years ago but, thankfully, there is a thriving rural tourism market in the county. County Kilkenny had a traditional tourism base which dwarfed Carlow. Will the Minister give a clear commitment to rural tourism development boards? What does he feel is their role? What is his view on potential funding for the boards, not only in terms of Exchequer resources but also fund raising activities? Such boards have expressed concern in this regard recently.

I refer to the tourism product development scheme which is provided for under the national development plan. Two major projects in my constituency await funding – the Barrow experience, which involves opening up the River Barrow from Carlow to St. Mullins, and the Carlow sensory gardens, which is being developed in conjunction with Delta, a special needs service in the county. Will the Minister outline when the applications relating to these projects will be dealt with and whether they will be successful? Can we do anything constructive to help them along?

Unapproved accommodation is having a detrimental effect on the tourism industry. Visitors are staying in B&Bs that are not approved by a national agency. The Minister is probably fed up hearing about this all the time but the issue must be examined so that a proper standard is applied across the board.

I wish the Minister well with his new portfolio. Tourism has great potential for growth, especially in the current economic climate. Money invested in the tourism industry will always generate a long-term return. I would like the Minister to outline his views on the tourism product development scheme and rural tourism development boards.

I warmly welcome the Minister to the House. This is his first appearance in the House in his new capacity and I wish him well. I thank him for his thoughtful contribution and overview of the tourism industry.

There have been major problems in the industry following the events of 11 September and the foot and mouth disease outbreak. There is no doubt the industry suffered a serious reverse from which it has not recovered yet. Tourist numbers have increased slightly but that might have been the result of domestic take up. Competitiveness is a significant issue vis-à-vis Europe. Airline capacity from the US has reduced by 20%. The Minister visited North America recently and I hope his trip was successful. He held discussions with airline representatives and I hope that will result in increased access down the line.

I urge the Minister to allocate funds for marketing the industry, particularly in Britain. The Minister has referred in a number of speeches to the cost of doing business in Ireland, particularly when one takes into account the cost of insurance and the other factors mentioned this morning. This issue has also come up in his consultations with various interest groups. It is a huge difficulty.

We have become an expensive location and we have lost out, particularly in the German market. I come from the same part of the country as the Minister where there are beneficial German interests, such as the Liebherr group and some hotels. More marketing must be done to attract golfers, walkers and fishermen from Germany.

I listened to Senator Daly on the monitor and that is why I decided to come into the House to speak. He spoke about the jewel in the crown, Killarney National Park. It is the most wonderful place on earth. When one goes through the gates, it is like escaping to paradise while one is still alive. One could wander at will as it is cut off from the cares and worries of the world. It is great to spend time there after a couple of days here.

An Leas-Chathaoirleach

William Butler Yeats is back.

There are other jewels in the crown in Kerry. One which is dear to my heart and of which the Minister is aware is Killarney Golf and Fishing Club.

Senator Daly mentioned Doonbeg, which is a lovely place I hope to visit. He should invite me there and I will issue a reciprocal invitation. I look forward to that. I do not want to take anything away from Doonbeg, Lahinch or any of the beautiful courses along the west coast, but we have many great golf courses in Kerry. The Leas-Chathaoirleach is an exponent of the game. No one in the House or in the other House has his back swing.

An Leas-Chathaoirleach

I thank the Senator.

I would love to be able to play the ball as well as some people, but I enjoy the walk and the invigorating exercise. There are great places in Kerry, such as Ballybunion, Waterville, Dooks, the Ring of Kerry, Kenmare and Tralee. One is more beautiful than the next. They are great for tourism. There are other golf clubs, such as Beaufort and Ross. More than 40,000 visitors go to Killarney to play those courses. There are three 18 hole golf courses in that complex in Killarney. The Irish Open was held in Killeen in 1991. Both it and Mahony's Point featured in the top 100 golf courses in the recent Golf World publication. That is an important marketing tool and we must continue to use it.

I was sad to read recent articles about the fact that there is more trouble ahead. I am talking about Killarney Golf and Fishing Club, which is a tremendous facility. Great credit is due to Lord Castlerosse and his successor, Mrs. Beatrice Grogan, who has since died. They established that club for locals and visitors. There are more than 1,700 members in that complex and more than 40,000 visitors play golf there every year. There is a members' club of which the members are proud. There is also a company and a trust controlled by Bord Fáilte which owns 75% of it – the Minister can correct me if I am wrong. We must have accountability and transparency. Matters were dealt with too secretively for too long. This major public asset is not one person's fiefdom. It belongs to all the people.

An Leas-Chathaoirleach

The Senator is straying from the debate.

It is all related to tourism. I am talking about a major asset and a jewel in the crown, as Senator Daly said. I bow to his superior knowledge. I am not making any allegations, but there are apparent breaches of law which must be put right.

An Leas-Chathaoirleach

Any breaches of law must not be discussed in the House in case they come before the court.

No one is above the law. We do not want to bring anything into disrepute. It is a great club. Bord Fáilte owns 75% of it and it controls the trust. I am sure the Minister wants to do what is right and I will support him. I wish the Minister well in his office. He will have the full co-operation of this side of the House.

I welcome the Minister's timely address to the House. It is difficult to analyse the causes of the decline in the tourism industry. It is easy to pinpoint the outbreak of foot and mouth disease in early 2001 and the 11 September attacks as major reasons for the decline, but perhaps the Minister could tell us if signs of the decline were apparent prior to those two major events.

There is no doubt that tourism is only a minor industry in places outside Dublin, Cork, Kerry, Connemara and Donegal. That is why I welcome the Minister's initiative to establish a national tourism development group. Bord Fáilte must be blamed for placing too much emphasis on the major tourism centres at the expense of other areas which were trying to build up a tourism industry from their own resources. A proper balance was not struck. Too much effort was spent on advertising in foreign tourist markets, such as America. I do not know if statistics are available, but if so they might show that we would have got a good return if we had concentrated on our domestic market.

In three weeks' time we will see hordes of people leaving the country for their winter holiday abroad. That has been facilitated by the decreasing cost of air transport. The tourist authorities should make an effort to keep those people at home. I am sure if the price, the facilities and the service delivery were right, they would stay in this country. A family of five could save money if they took a holiday in Ireland rather than going to the Continent or to Britain. It is said that people will not stay here because of the weather. However, I do not believe that is a dominating factor in people's decision to leave. One of the priorities of the new national tourism development group must be to look at the internal market, to provide facilities across the country and to make it more financially attractive for people to holiday at home.

Readers of local newspapers will have noticed an increase in the number of breaches of hygiene regulations by food outlets, hotels and restaurants in recent years. This is a serious development because it is new to the tourism industry which, until recently, was conscious of the need to provide quality of food and service for the customer. Carelessness is growing in the industry in respect of these two areas, which are vital cogs in efforts to promote Ireland abroad. We must avoid being branded with a reputation for carelessness and sloppiness.

These problems do not afflict our elite establishments. The top end of the market offers some of the finest hotels and excellent service delivery. On the other hand, it is very expensive and, therefore, beyond the reach of the majority of domestic customers and foreign tourists. Greater monitoring of outlets and hotels offering tourist accommodation and facilities is required.

I ask the Minister to consult and liaise with other Departments and official agencies, in particular, the Office of Public Works and Dúchas with regard to their facilities. It is now very expensive to gain access to many public buildings and monuments. I have in mind Portumna Castle, close to my home, for which the entrance price for a family is prohibitive. We must ensure recognition is given to the type of holiday where a tourist group or family will visit a number of such monuments, museums or buildings during their holiday. We could cater for them by introducing a mechanism whereby entrance charges are reduced for multiple visits. The expense of such visits adds to the high cost of tourism here.

Gone are the days when tourists would stay for a week or fortnight in one place, for example, Salthill. For this reason, the Minister should liaise with the car hire firms, which are among the most expensive in Europe. While tourists benefit from cheap flights, their savings are undermined by the high cost of internal transport, particularly with regard to car hire.

In introducing the new structure for tourism, I ask the Minister to ensure consideration is given to developing areas outside the traditional tourism sectors. Resources must be directed towards enhancing facilities in these areas to make them attractive for the domestic tourism sector.

I thank Senators for their contributions and commend them on the depth and range of their interventions. I wish Senator Daly well in his role as Government spokesperson on arts, sport and tourism. I have no doubt he will bring his considerable experience as a former Minister and Member of both Houses to bear on this important portfolio. I also wish Senator John Paul Phelan and Senator McCarthy well in their roles as Opposition spokespersons. I look forward to working with them in all three areas in the interests of the country.

It is very appropriate that the tourism sector should attract the level of interest and debate it has in recent times, both inside and outside the Houses of the Oireachtas. It is clear from today's statements that tourism is particularly highly valued at local and regional level, which is not surprising given the number actively involved in and benefiting from the sector, and makes an enormous contribution to the national economy.

I am convinced the potential for tourism remains very strong, provided the industry maintains its focus on the key steps to sustained growth. To achieve this potential, there must be a concerted drive to tackle a number of underlying issues, including relative competitiveness, value for money, quality and the unique holiday experience for which Ireland is famous.

As I mentioned, since my appointment as Minister, I have made it my business to meet as many people in the industry as possible and will continue to consult widely in order to ensure the Government response is timely, relevant and adds value. I have been very impressed by the obvious enthusiasm within the industry to regain momentum and to do so by continuing to foster and promote the very effective working partnerships between the public sector and the industry which delivered such positive results during the 1990s.

A number of speakers mentioned various cross-cutting issues which, while not the responsibility of my Department, can nonetheless have an impact on tourism. Such issues can be considered as appropriate under the forthcoming tourism policy review. Regarding the national conference centre, my Department is undertaking an assessment of the case for the provision of such a centre and how it might be achieved. I hope to be in a position to take the matter to Government for further direction shortly.

The Special Olympics World Summer Games is a major event in Ireland's 2003 calendar. A recent update on progress made with the preparations for the games, based on information provided by the organisers, is available in the Official Report of 22 October last. Reference was also made to the national Community Games. The question of the provision of venues for sports events is a matter in the first instance for the sports organisations concerned. Notwithstanding this, in my previous portfolio as Minister for Justice, Equality and Law Reform, I met representatives of the national Community Games and assured them that my then Department helped to facilitate arrangements for the continued availability of Mosney camp for the national finals. I was very pleased to attend the 2002 national finals at Mosney.

If there are proposals in relation to an alternative venue for the national finals, I would be glad to arrange for officials of my Department to discuss the issues involved with representatives of the Community Games organisations. I understand they have been in touch with my office requesting a meeting with a view to discussing a permanent venue for the Community Games. I will be pleased to meet members of the organisation, for whom I have the greatest admiration.

Other concerns touched on today are the very issues the industry and tourists have been articulating, the latter especially through Bord Fáilte's annual visitor attitude surveys. It seems everyone has his or her story this year about the cost of eating and drinking out, the price of food in shops and the cost of living generally. Our visitors are no different.

The advent of the euro has allowed for more transparent pricing comparisons. This is placing Ireland's competitive position relative to other European tourist destinations under very real threat and highlights the need for macroeconomic policies designed to improve our international competitiveness and tackle inflation. In this regard, I commend the Tánaiste and Minister for Enterprise, Trade and Employment for her commitment to addressing what seemed to be the ever escalating rise in the cost of insurance. While the impact of this has been felt far beyond the tourism sector, it has been an additional burden that many could have done without.

As is generally acknowledged, after a decade of continuous growth the last two years have been very challenging for the tourism industry. There is a high and understandable level of uncertainty in the sector, but we have seen clear evidence of its resilience not least in terms of the innovative methods used in recent months to target the domestic and British markets. Those markets seemed to provide the best prospects for generating additional business and, by all accounts, targeting them has been the right move. I am pleased to have been able over the summer to free up additional funds for extra front-line marketing activities and I have been happy to lend my support to Tourism Ireland in its recent promotional campaigns in the United States and Britain for next season. I have already outlined the broad policy objectives that will guide my work over the coming months and I assure the House that I will continue to do my utmost to support and develop the industry during my period in office.

As has been pointed out, our share of the continental market is relatively low, which is something we must address. The German market represents a particularly good litmus test as our share of it has been falling, which is a worrying trend. I have encouraged Tourism Ireland to develop a new marketing strategy for Germany for 2003 and I hope that when I unveil it we will see changes to ensure we diversify where necessary in terms of attacking that market. Germany is a litmus test because if business is good there, Europe very often follows suit.

The problem of access remains. Lower fares from the Continent would make an enormous difference and the provision in this respect of a new terminal at Dublin Airport will be very beneficial to both the Republic and the North. I sincerely hope we see improved access which would mean greater numbers and greater revenues.

There has been a feeling in the industry that this year would show a decline in visitor numbers. Early indications, though not confirmed, suggest this is not the case. The American market is down, though it has fallen not, as was feared, by up to 20% but by 10%. If confirmed, that performance is particularly good. The British market has performed spectacularly well in view of the backdrop to the season and will show an improvement of 6%, which is significant as well over half of our visitors come from there. A 6% increase means an extra 250,000 visitors, up from 4.35 million to 4.6 million. Indications are that the continent has performed relatively well with our share of the market increasing by 3% and when the drop in American figures is accounted for, it is anticipated that the number of visitors entering the country in 2002 will have increased by around 3%. Confirmation of these figures will illustrate beyond any doubt, the resilience of the industry and its vast potential for growth.

It is sometimes forgotten that after an investment of €4.3 billion tourism is a very sophisticated product, which is the reason I initiated the tourism review to chart the course ahead, in 2003 and beyond. Tourism is now a major player in the economy and will very shortly become the largest industry we have, outstripping the agri-food sector. This represents a tremendous performance by an industry which was very much a Cinderella up to 20 years ago and is a tribute to the policies of successive Governments and the industry itself.

Senators have correctly pointed out the need to market the island properly. There is no doubt that a lack of funding for marketing can only be adverse which is why, even in the context of the present budgetary constraints, I am striving to ensure that in 2003 we, at the very least, maintain market spend at this year's level. You speculate to accumulate in any business and that was never more true of any industry than of tourism. Yesterday I attended the world travel market in London and could see how truly competitive tourism has become. Countries all over the world had stands at the market and it was an education to look at the level of competition Ireland faces internationally. There are countries emerging from the dark days of communism, countries evolving into democracies and others which are not so democratic vying for international business which is why Ireland must remain competitive and maintain its product at a sophisticated level. Ireland boasts some of the finest food in the world, one of its cleanest and best environments and accommodation that is second to none and we must guard against any inclination to benefit to excess. It is very important that we maintain the product at a competitive price.

Recently in America I met most of the major tour operators who carry visitors to Ireland and they stressed the need to maintain the marketing spend as well as the need to ensure that the window of opportunity is kept clear. It was very interesting, in that context, to hear them and Irish corporate interests say that the cancellation of the St. Patrick's Day parade over the foot and mouth crisis was a devastating blow. These are important matters which should be borne in mind in future. We must at all times take advantage of the plus factors and it is essential from a public relations perspective that we remember that.

We have a product which can grow further and need to expand our efforts in Germany and on the rest of the continent of Europe while remembering that this is not and never will be a low cost mass destination. Ours is a different product which has to compete successfully with those of other northern European countries. Next year will show a further improvement in tourist numbers, but it is difficult at this stage to anticipate what that improvement will be. If we manage to compete internationally in terms of price, to improve access and to continue to market aggressively in the regions which count, the overall benefit to the economy will be spectacular.

Sitting suspended at 2.10 p.m. and resumed at 2.30 p.m.
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