I thank you, Chairman, and the members of the Committee for this opportunity to elaborate on the details of the Supplementary Estimate for my Department's Vote. The additional expenditure proposed under this Supplementary Estimates relates exclusively to the tourism side of my Department and before going into the details, I believe it would be useful to review briefly the recent performance of the sector and put what I am now proposing into context.
One of the most striking features of Irish tourism in recent times has been the very high growth rates achieved by the sector. Over the past ten years Irish tourism has enjoyed astonishing success with visitor performance and revenue growth increasing annually. The recorded statistics for the sector show that the number of overseas visitors has increased from 2.4 million in 1988 to 4.7 million in 1996. Over the same period total foreign exchange earnings have more than doubled from £841 million to a staggering £1.9 billion. In addition, tourism now supports 108,000 jobs, an increase of 46,700 since 1987, and accounts for one in 12 of all jobs. I congratulate the policies of the various Governments for those staggering statistics.
The upward trend in visitor numbers, foreign revenue and employment vividly confirms that Irish tourism has been an outstanding success, one of the fastest growing sectors of the economy and, more importantly, a major contributor to Ireland's economic success. However, as we face the remainder of the decade the challenge for all of us to create further economic growth and employment has never been greater.
There is an overwhelming need, therefore, to enhance our competitive position vis-à-vis rival destinations and, in so doing, ensure that we sustain growth levels in tourism performance and expand market share worldwide.
Selling Ireland abroad as a holiday destination is one of the most important and crucial investments we can make for the future of this economy. Given the necessary support from the Government but, I stress, more importantly from the industry itself, the Irish tourism sector has the capacity to meet the Government's target of increasing foreign tourism revenue to £2.25 billion by 1999 thereby creating 35,000 job equivalents.
At national level the indications are that 1997 will be yet another record year for overseas visitor numbers and revenue. It is likely that the targets of 7 per cent growth in visitor numbers and 9 per cent in foreign revenue will not alone be achieved but may even be exceeded. Having said that, I am aware of concerns that the increase in tourism growth is not equitably distributed throughout all regions and that although all regions - and I point this out continuously - have shared in tourism revenue growth rates, which are better than international and European averages, there have been variations in performance. Strong performance in the British and North American markets has driven the national increases, but the smaller growth from mainland Europe - including a decline in business from Germany, which may be due in part to economic difficulties there - has disproportionately affected the west. Research undertaken last year by the Irish Tourist Industry Confederation showed that all regions grew. The rate concerned me, however, because it is in the west that tourism is the main industry through which we can generate substantial employment over a short period.
From the beginning of my tenure as Minister with responsibility for tourism I fully recognised that one of the most important and immediate tasks was to ensure that, with the support of the sector itself, sufficient resources would be made available to sell Ireland in the foreign marketplace. With research indicating that over 51 jobs are supported by every million pounds of overseas tourism expenditure and 36 jobs per million pounds of domestic tourism expenditure, it was very evident how significant the potential economic impact could be on those areas which are currently lagging behind if they can be helped to increase their tourism capacity. Accordingly, I was also determined to encourage a better regional spread of tourism benefits and to ensure that the needs of all regions in this regard were addressed.
That is the background against which this request for supplementary funding for my Department arises. The purpose is to facilitate increased payments by Bord Fáilte in respect of its 1997-8 marketing programme before year end, which will allow more marketing by the company in 1998. At my request, therefore, Bord Fáilte has come up with proposals to increase and intensify its level of promotional activity for the coming tourist season. It has devised a multi-layered approach which consists of enhancing existing programmes, introducing new regional initiatives and exploiting opportunities which are coming on stream.
Furthermore, it is intended to secure a regional emphasis in the activities proposed and to maximise the return by integrating activity at local, regional and national levels. This new approach, which consists of ten initiatives, is divided into three elements: national programmes, regional initiatives and special projects.
In the case of national programmes, it is proposed to supplement the existing destination marketing campaigns carried out by Bord Fáilte, its advertising partners and the Overseas Tourism Marketing Initiative - OTMI. The availability of additional funds will permit an earlier and more extensive presence in the four main markets of Britain, the US, France and Germany as well as increased activity in the developing markets of Scandinavia, the Benelux countries and Australia. The rationale of this investment is based on the use of advertising campaigns to create awareness of Ireland as a destination and thus improve the environment for and success rate of other marketing activity.
Bord Fáilte proposes to use some of the proposed funds to support the development of the 1998 campaign, particularly the press campaign. As part of the development, an extensive new photographic shoot would be carried out which would extend the range and quality of material available to support regional marketing.
Integral to the continued development of the award winning Tourism Ireland Internet site and capabilities will be the introduction of sections of the main site for each tourism region. In certain cases individual county and area sites will also be facilitated to link to the main site.
Last year a travel agents' education programme was initiated in Britain and proved to be highly successful in educating tourism retailers not only about Ireland generally but on the various products and regions which make up the destination. It is now proposed to extend this programme to the US and Europe where it will be invaluable in increasing the knowledge of those people who ultimately "sell" Ireland in those markets.
Moving on to the specific regional initiatives, it is intended to introduce a range of advertising, publicity and other activities in the area of niche marketing. Here the aim will be to select those products which offer the best return in those markets with the best likelihood of success. As the products envisaged for targeting by Bord Fáilte - angling, golf, equestrian activities, walking, culture and so on - form the major products of the regions in question, there will be automatic benefits for the regional distribution objective.
Another initiative which will be used to secure direct regional impact proposes that funds will be provided to each of the regional tourism authorities. These funds, which will be made available on a sliding scale based on priority, will be used to integrate and supplement local and regional marketing activity already planned. In this regard, it is expected that all planned expenditure by each authority will be carried out in a fashion entirely consistent with national destination spends. In practical terms this may mean that any regional marketing activity to be covered by the measure will require approval by Bord Fáilte before payments are made.
Although major strides have been made in advancing the seasonality profile of Irish tourism, further opportunities exist to improve plant utilisation, particularly in the less developed regions. It is proposed to extend the already successful investment in developing new, early season events such as the Celtic Flame Festival and the national St. Patrick's Day Festival. This will also be included in the Supplementary Estimate.
In the area of special projects it is intended to provide marketing support for the introduction of new air services from the US to both Shannon and Dublin. It is also intended to build on Tour de France publicity, which is a major opportunity for Ireland in 1998, not just in France but across all Europe and Britain. Due to the scale and importance of this project, it is anticipated that the benefits of this promotional initiative will be secured for several years beyond 1998.
An exciting opportunity exists whereby an Australian television company would carry out a week long series of programmes from Ireland in 1998. These programmes, which it is proposed to support, would be broadcast from different parts of Ireland, thus increasing regional awareness in one of our rapidly developing markets. Overall, this programme, which it is intended will commence immediately and will be substantially completed in the first quarter of 1998, represents an important opportunity to ensure significant tourism growth continues apace and that the benefits are felt throughout the country.
However, if the success story of Irish tourism is to be sustained, marketing Ireland abroad will also have to receive support not only from the Exchequer but in increasing amounts from the tourism industry itself. If we are to be able to compete in the future, particularly in the fast approaching post-1999 situation, Irish tourism will have to be able to draw resources from a much wider pool of sources than it does now. Compared to Ireland, the countries throughout Europe with whom we compete draw on large contributions raised directly by the tourism industry. Bord Fáilte is engaged in discussions with our industry with a view to ensuring the efforts of Government are matched by the tourism industry in funding their international marketing programmes.
I will now deal briefly with adjustments in various subheads under the Vote which partly offset the increased funds required under the Supplementary Estimate. Under subhead H-Appropriations-in-Aid - a deficiency of just less than £3 million is expected mainly in respect of ESF receipts under the urban initiative and the Programme for Peace and Reconciliation. A repro-filing of expenditure under these programmes has resulted in a slower than expected rate of drawdown in 1997 which in turn has resulted in a reduced level of receipts under these programmes.
The saving of just over £3 million under subhead G.1 Local Development - arises primarily on the technical assistance programme of the operational programme for local and rural development. Certain costs for computerisation and to fund recommendations of the programme's mid-term evaluation will not fall due in 1997.
Under subhead G.2 - Urban Initiative - a saving of approximately £3.6 million is expected. Funding under this programme is allocated to certain targeted urban areas on the basis of comprehensive strategies and action plans submitted by those areas. The preparation of these has taken longer than expected resulting in a slower drawdown of funds in 1997.
Under subhead G.3 - Programme for Peace and Reconciliation - a saving of just over £1 million will arise. As with the urban initiative, the effort required to ensure that strategies, action plans and projects were properly prepared and evaluated has resulted in a slower drawdown of funds in 1997.
It is important to remember that the above programmes, as with all EU programmes, will continue until the end of the current round of the CSF in 1999. Therefore, funds not spent in any one year may be carried forward to be spent in subsequent years. Similarly, EU receipts under these programmes not realised in 1997 are merely delayed until a subsequent period.
In conclusion, I thank the Chairman and the other Members of the committee for the opportunity to make this presentation today. l will be happy to answer any questions on the detail of the Supplementary Estimate in conjunction with my colleague, the Minister of State, Deputy Flood.