I welcome the opportunity to address the House on the report of the tourism policy review group, which has been eagerly awaited by all those with an interest in the further successful development of tourism. The report is the most important and authoritative document on tourism policy and performance in over a decade.
When I took over responsibility for the tourism portfolio nearly a year and a half ago, I was conscious that the industry was at a turning point. After a prolonged period of significant growth, I recognised that the tourism business was undergoing fundamental changes internationally and that changes in the domestic economy were also bringing about a new series of challenges which threatened to undermine the future of the industry in Ireland.
I am grateful to John Travers and the other eminent members of the review group for agreeing to take up my invitation to carry out this work. The quality and depth of their report speaks for itself. From the outset, the group carried out the widest possible consultation, including an open public forum which was advertised in the national press. The body of oral and written submissions it received is a testament to the widespread interest in the exercise.
The review group itself was unique, including not only public and private representatives of the tourism industry, but also independent business people and other experts who brought a broader and perhaps more critical and independent assessment of the sector.
The report includes an overview of tourism world-wide, an assessment of the economic contribution of the tourism sector to the Irish economy, an analysis of recent tourism performance, a detailed assessment of tourism in Ireland today and an outline of the challenges and opportunities facing the industry. However, more importantly, it proposes a coherent and integrated strategy for Irish tourism for the next ten years and a series of recommended actions to implement the strategy. It clearly identifies the large number of quite different stakeholders that influence tourism development and it highlights the need for co-ordinated and integrated action to influence the wider agenda that impacts on Irish tourism.
One of the key conclusions which the review group arrived at was that the ultimate determinant of success in Irish tourism would be "an energetic, innovative and profitable private sector, operating within a domestic environment where Government policies and actions are supportive of business investment in tourism". That statement captures exactly what I would like to see for the industry over the coming decade – an energetic, innovative and profitable sector.
The review group has set ambitious targets for the next ten years – 10 million overseas visitors annually by 2012 and a doubling in revenue from overseas visitors to €6 billion per annum. These are extremely ambitious but achievable since it has been done before. In 1990 we had just over 3 million overseas visitors a year. The decade that followed saw us more than double that number. I am pleased to report that the Irish Tourist Industry Confederation, whose considered views on the report I received recently, agree the targets are "potentially attainable". Their provisos are that the assumptions on which they are based prove accurate and that the central elements across the entire strategy are accepted and implemented successfully.
One of the key assumptions underlying the strategy is, of course, that international tourism will continue to grow and that Ireland will increase its share of current and developing markets. This is against the backdrop of yet another challenging year for the tourism industry globally and when, yet again, Irish tourism has had to prove how robust and resilient it is.
The World Tourism Organisation predicts that 2003 will be a flat year for global tourism and only forecasts the number of visitors to Europe to grow by less than 1%. Based on its analysis, Europe has fared better than the Americas or the Asia-Pacific regions which were affected more severely by the war in Iraq and SARS. The latest figures for tourism to Ireland show an increase in visitor numbers of over 3% for the first six months of the year. The best market intelligence available suggests that this level of growth may be sustained for the year as a whole. On these figures alone, Ireland's performance this year is positive. Ireland has seen an increase in visitor numbers in some of our key markets, including the very important British market. This represents a strong endorsement of the marketing strategies being pursued by the State tourism agencies.
In considering the performance on a market by market basis, the indications are encouraging. Ireland is set to increase its share in many of its major tourism markets this year, despite the intense competition that is now such a feature of international tourism. Ireland has managed to increase numbers from Britain by over 2% in the first six months of this year even though outbound tourism has been flat. Similarly, in mainland Europe, Ireland appears to be outperforming its main rivals in Germany, France, Italy and Spain. The North American market also appears to be turning the corner with strong growth achieved this year for the first time since 2000.
The overall projections for the year from the tourism agencies are also positive with forecasts predicting a 3% increase in visitor numbers to 6.1 million visitors, with British visitors up 2%, mainland European visitors up 6% and North American visitors up 7%. If this level of growth is achieved, it would represent a good performance in a difficult year.
The news this year is not all positive. It is evident that, in meeting the challenges of an increasingly price-conscious market, the industry's bottom line has come under more pressure this year. The average length of stay of overseas visitors continues to decline and the continued growth in the capacity of the hotel sector impacts on the overall share out of bed nights generated by visitors to Ireland. Tourism Ireland and Fáilte Ireland are focusing increased marketing resources on longer stay market segments although the tremendous growth in the short break market has been a major factor, both in Ireland and worldwide.
Speaking of the increasingly price-conscious market brings me back to another of the key messages from the review group, that the greatest challenge facing the tourism industry is to restore its competitiveness. Restoring competitiveness must be a common goal for the entire Irish economy, but it is especially important for the tourism sector which has to compete internationally for its customers. From a marketing perspective, it is vital for the sustained development of tourism that the industry continues to deliver the quality of holiday experience that tourists to Ireland have come to expect.
In its report, the review group makes the point that competitiveness is not just about pricing, but must also be a function of the total Irish tourism experience for customers relative to other locations. This starts from initial inquiries about visiting Ireland, right through to travelling here, where people go when they get here, where they stay, who they meet, what they do, what they see and their perceptions about price and quality.
Another key message of the report is that a high and increasing proportion of visitors have expressed concerns about competitiveness. The industry should recognise that it has primary responsibility for offering better value to its customers, if it is to maximise the opportunities for future growth. Delivering value for money to the customers must continue to be foremost in the minds of all those involved in the tourism sector.
There is no immediate, single or easy solution. Having identified competitiveness and value for money as key strategic drivers of success for Irish tourism, the review group listed some ten specific actions to deliver the strategy which require responses from both the private and public sectors. The list includes proposals for taking responsibility for restoring competitiveness, inflation, benchmarking, customer relations, management capability, training and making high standards Ireland's competitive advantage.
Visitor attitude surveys continue to find that Ireland is still highly rated for the beauty of its scenery and for the friendliness and hospitality of our people, indicating that our traditional welcome is much appreciated. In a high wage, high productivity economy like ours, we need to encourage a relentless pursuit of higher standards in all aspects of tourism as a competitive response to lower cost alternatives in other holiday destinations. This brings to mind an event I attended last week in the National Museum where I was asked to present Fáilte Ireland's Irish welcome awards. The Irish welcome is the trademark that represents us to the world at large. It is treasured and we are famous for it at home and abroad.
It is an extremely valuable and living symbol, both as part of who and what we are and as an attribute that sets us apart and gives us an edge over our competitors in an increasingly competitive marketplace. I put on record my appreciation of the key role that initiatives such as the welcome awards play in helping to achieve our tourism goals. The scheme extends to a wide variety of enterprises across the tourism spectrum. It is based on a customer nomination system and, as such, provides the most appropriate basis for identifying tourism practitioners par excellence. Finally, and most importantly, it serves to acknowledge and celebrate the bringing together of the key ingredients necessary for tourism success.
Those whose efforts were celebrated last week are at the coalface of Irish tourism, the place where it really matters to visitors whether a professional and excellent job is done and where Irish tourism can create happy and memorable experiences, for overseas visitors and Irish holidaymakers alike. I am sure many Senators know a great number of other people working in tourism areas with which they are familiar who would merit similar awards. The delivery of a quality service is key to the future success and profitability of the tourism industry as a whole.
As regards the recommendations in the report directed at my Department and the tourism State agencies, I am pleased to report that a number of the actions are already underway. For example, the tourism unit of the Department has been re-configured, advertisements seeking expressions of interest in relation to the national conference centre have been placed in the media and bilateral consultations have taken place with the Department of Finance on taxation issues and with the Department of Health and Children on the anti-smoking regulations. I have been advised that Fáilte Ireland is taking account of the recommended actions and suggested timescales relevant to it in its operational planning for the remainder of this year and next year.
In addition, Fáilte Ireland has announced a new initiative to address the cost of insurance across the sector in co-operation with industry representative groups, including the Irish Hotels Federation and the Restaurants Association of Ireland. Similarly, Tourism Ireland Limited has completed an examination of the recommendations in the report that impact on areas within its remit and it has incorporated a number of these into its three year marketing strategy and detailed operating plan for 2004.
Where do we go from here? I am determined that the excellent work of the review group will be capitalised on and that the momentum generated by the focus on the tourism industry will gather force. The review group worked with an equal vision and put the emphasis on an agenda for action, identifying the concrete actions that need to be taken to help ensure the implementation of the new strategy. The first two year rolling plan included in the report is a very ambitious and challenging one, involving over 70 individual recommendations. These are directed not only at my Department, the tourism State agencies and other Departments but, perhaps more importantly, to representatives of the tourism industry and individual tourism enterprises. I welcome the significant contribution to the development of policy represented by the report of the review group and I will ensure that the recommended actions are pursued not only within my Department and the State agencies under my remit, but also with industry representative bodies and my Ministerial colleagues.
Having recently received the considered views of the Irish Tourist Industry Confederation on the report and the shape of the proposed high level implementation group, I hope to be in a position shortly to establish a small group to drive forward and monitor the action plan. I take this opportunity to mention that Tourism Ireland's market plans for 2004 are already well advanced. I am delighted also that the Exchequer provision for marketing in 2004, under the tourism marketing fund, has been increased by a further 3.5%. In early December, I will launch Tourism Ireland and Fáilte Ireland's joint marketing programme for 2004 and I am confident that next year's campaign can build on this year's performance.
Among the initiatives planned for the British market next year will be a focused drive on the "family holiday" market, which is so important to length of stay and regionality, an aspect of the tourism industry that I know is of particular interest to many in this House. There will also be increased emphasis on direct marketing, in conjunction with industry partners. The challenge now is to replicate the growth achieved in the 1990s, to improve the quality of our product and our competitiveness and to look to a new horizon for Irish tourism.
The report of the tourism policy review group not only provides us with the challenges, it also points the way and tells us how we can get there. I will be actively working to ensure that all partners in the process are working together to achieve this vision. I am confident that, with a shared understanding and partnership between key decision-makers in both the public and private sectors, the full potential of the tourism industry can be realised. We have been presented with the most comprehensive, authoritative and visionary document ever produced on one of our most important industries. We have been told in no uncertain terms of the value of tourism to this economy and this country, of the challenges it now faces and how to ensure it can grow as it needs to and as it should be allowed to. I am of the strong belief that we are now at the beginning of something very important that should lead to the full recovery of the Irish tourism industry.