Wednesday, 25 February 2004

Questions (22)

Richard Bruton


104 Mr. R. Bruton asked the Minister for Arts, Sport and Tourism his views on the effect that the weakening dollar will have on the number of US tourists coming here in 2004; the measures he intends to put in place to make Ireland a more price attractive destination for US tourists; and if he will make a statement on the matter. [6156/04]

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Oral answers (5 contributions) (Question to Minister for Arts, Sport and Tourism)

In 2003, Ireland performed strongly in the US market against stiff international competition. While final figures are not yet available from the Central Statistics Office, Tourism Ireland estimates a 6% increase in US visitor numbers to the Republic of Ireland last year despite the impact of the war, increased threats of terrorism and SARS. This compares to a 1% increase in the number of Americans visiting Europe generally and a decrease of 8% experienced by our near neighbours in the United Kingdom.

Building on the positive performance last year, the early indications are that interest in visiting Ireland remains strong among US consumers in 2004. The target for 2004 is for a 6.8% growth in visitor numbers from the US. In that context, Ireland's competitive position appears to be holding up well even against the continued depreciation of the dollar against the euro. However, as the main holiday booking season is a number of weeks away, it is too early to make definite judgments on any adverse currency impact.

The euro is more than 25% stronger now than it was at the start of 2003. This problem is not unique to Ireland but to all eurozone countries and to sterling. It is particularly important, however, that prices on the ground in Ireland are kept in line with those in other eurozone destinations. To bring home the message that Ireland continues to offer value for money, Tourism Ireland is engaging in a major co-operative marketing campaign this year with tour operators and carriers in this vital market, which will promote a range of specially priced offers for travel to Ireland. These offers are also featured on a special offers website,, which is being extensively promoted to the American public in key US cities.

As I have said in previous replies on the broader issue of competitiveness, I very much welcome the fact that the key message from the tourism policy review group is that restoring competitiveness is the major challenge facing the tourism sector and that the industry must offer better value to its customers if it is to maximise the opportunities for future growth.

Competitiveness must be a function of the overall Irish tourism experience for customers relative to other competing locations, beginning with their initial inquiries about visiting Ireland through to their travelling here, where they go when they arrive, where they stay, who they meet, what they do, what they see and their perceptions about price and quality.

Despite the growth, last year we were still over 100,000 short of the peak numbers in 2000. Therefore, we still have some way to go to get back to that level. The indications I am getting from the market show that while it was looking well, there are now some doubts overhanging it. The Minister should ensure that we will remain as price-competitive as possible to attract more American tourists. For example, green fees can easily be influenced, with air fares and accommodation costs, including bed and breakfast establishments, guest houses and hotels. Restaurants and other services must remain price-competitive also. The strengthening euro will make Ireland less competitive, although I realise that the same problem exists across the eurozone. The Minister is aware that we have high staff rates and are on top of the European price league. He should take steps to ensure that, wherever possible, green fees in 2004 are kept at the same level as they were last year. Other prices must be kept under control also. If the figures do not prove to be as good as last year, does the Minister have contingency plans for the American market to attract more tourists? The Taoiseach, the Minister and other Ministers will visit America on St. Patrick's Day. What plans are in place to promote Ireland on St. Patrick's Day given that it represents an ideal opportunity?

We have been in contact with Ministers travelling abroad to give them information packs on the countries they are visiting and speaking notes and so on to promote Ireland. The Taoiseach correctly identified St. Patrick's Day as a window of opportunity for Ireland. He is of the view that visits by Ministers to various parts of the world and America, in particular, can be extremely beneficial in terms of ensuring Ireland's profile is raised. It is also a time when Ireland can be sold for other purposes and, therefore, such opportunities are grasped, which is wise.

We have also been in consultation with Ministers regarding the possibility of them becoming involved in tourism promotion at other times of the year when they travel abroad in connection with their portfolios, except when they are on EU business. The Taoiseach is also anxious that this should happen. The tourism industry performed strongly in America last year considering that the number of Americans who travelled abroad reduced by 8%. However, the number of Americans who visited Ireland increased by 6% while the increase in the number who visited Europe generally only increased by 1%. Ireland's success was not mirrored elsewhere in Europe. We are looking forward to a better year this year with a growth target of 6.8%. All the indications are this is achievable.

The Deputy referred to competitiveness and costs. Certain developments in recent months should result in tangible benefits for the sector and make a difference to competitiveness and value for money. For example, a minimal increase in the budget in indirect taxation and excise duties on products that are part and parcel of the tourism experience, will help. The Fáilte Ireland initiative in co-operation with the industry to address the high cost of insurance premiums in the sector and the implementation of the Government's insurance reform package will help, as will the reduction in the cost of accommodation reported by the CSO earlier this month. There has been a significant reduction in annual inflation. It stood at 1.8% in January, which is a major reduction from 3.5% in July 2003 when the review group was finalising its report, and it is much more in line with the EU average rate.

I am pleased with the reports regarding the US market so far. With regard to contingency plans, a strong marketing campaign has been under way in the US since late last year for this season. The campaign will yield results. The carrying capacity of airlines from the US remains a worry. If there was a greater number of gateway cities, which Aer Lingus or other airlines could utilise, the numbers visiting Ireland would increase beyond our projected growth. That is an issue for another day.

If the dollar continues to experience problems against the euro, can the Minister do anything to make it more attractive for American tourists to visit Ireland? Their holiday will cost them 25% more this year than in 2002.

The strength of the euro against the dollar is not conducive to helping the situation. However, other countries are experiencing this difficulty. Nonetheless, since the Iraq war, there is a pent up desire among many Americans to travel. This will more than offset the disadvantage that all countries within the eurozone are experiencing as a result of the low value of the dollar against the euro. A strong marketing campaign is under way in the US and this year we will be close if we do not exceed our record year in that market. I am confident we will be there or thereabouts.

Written Answers follow Adjournment Debate.