Dáil Éireann Debate, Wednesday - 10 May 2017
46. Deputy Robert Troy asked the Minister for Transport, Tourism and Sport if he will increase the tourism marketing budget to mitigate the decline in visitor numbers from the UK experienced in the first quarter of 2017; and his plans to implement a business support fund to aid small to medium-sized tourism businesses affected by the decline in visitors from Britain. [22125/17]
View answerWill the Minister now acknowledge that Brexit poses a real threat to the tourism industry, something he did not seem concerned about originally when the result of the referendum came out? I refer specifically to the decline in visitor numbers from the UK in the first quarter of 2017. Will he confirm to the House whether he has any intentions to increase the marketing budget to Tourism Ireland to mitigate this decline in visitor numbers?
Following what was a record year for overseas visitors to Ireland in 2016, recent figures published by the CSO showed that overseas visitors in the first quarter of 2017 were slightly up on 2016. While there was strong growth from the North American market, visitors from Britain were down 6.5% year on year.
It is too early to state definitively the reasons for this decline and whether it will carry through to the remainder of the year. It is clear, however, that the depreciation of sterling following the Brexit referendum has made Ireland, and every other eurozone country, more expensive for British travellers than was the case previously. Furthermore, research has indicated that British consumers are likely to scale back on overseas holiday activity this year.
The tourism action plan is committed to seeking to restore the tourism marketing fund to pre-recession levels on a phased basis. I have secured increased funding for the tourism marketing fund this year of over 2% and will seek further additional funding for next year to mitigate any negative effects of Brexit on tourism. Tourism Ireland will continue to focus on protecting our market share in Britain while at the same time seeking to increase diversification into other markets, particularly those that deliver higher tourism revenue.
Fáilte Ireland is also working on a number of fronts to assist the diversification and development of our tourism industry and the attractiveness of our tourism product offering. Ongoing work to develop the main experience brands and enhance visitor experiences is aimed at boosting our appeal to key target markets and priority consumer segments. Regarding training and business supports, Fáilte Ireland offers a suite of supports to enhance the competitiveness, enterprise capability and sustainability of the tourism sector. In addition, it is creating a new Brexit response programme that will focus on delivering a capability building programme for industry.
Maintaining the overall competitiveness in our tourism industry is also vital at this time. While the industry itself acknowledges its primary responsibility in this regard, I will be endeavouring to assist by seeking to maintain the lower VAT rate for the tourism industry and to keep the air travel tax at zero.
No one disputes that tourism is a critical sector. Last year, 9 million visitors contributed €4.5 billion in revenue, supporting 220,000 jobs. It is a critical sector. I acknowledge there have been previous initiatives that have supported the sector, but I raise this in the context of Brexit. We cannot rest on our laurels and be complacent about the fact that visitor numbers from other destinations are up. The simple fact of the matter is that 41% of tourists coming to this country come from the UK, a figure that fell significantly in the first quarter of this year. While I do not want to cause alarm, we need to put in place a plan to mitigate this. Not only have we a decrease in the number of visitors from the UK, we are now competing with the UK, which offers a fairly similar experience to that which one can get in Ireland. The UK Government, following the Brexit vote, allocated in excess of £35 million to its marketing fund in order that it can market the country. What specific items-----
The Deputy is out of time. I call the Minister.
-----is the Minister implementing to mitigate the decrease in visitors from the UK?
The Deputy has taken 30 seconds over his allotted time. I ask him to watch the clock.
The Deputy is correct to raise this as a serious issue, flag it as a difficulty and ask the question about the response, and there is alarm about Brexit, especially its effect on tourism. However, I point out to him, notwithstanding the recent CSO figures, and I think he is referring to visitors from Britain, that Tourism Ireland aims to grow overseas tourism revenue by a further 4.5% in 2017. The issue is to find new markets and address the matter through the Brexit response. Tourism Ireland has sought additional funding for the tourism marketing fund to address urgently the declining share of voice advertising awareness in key markets overseas; increase focus and investment in the short to medium term in mainland Europe and North America; defend Ireland's tourism position in the vital Great Britain market, dealing with the emerging threats and securing business while also maximising opportunities for the future; and accelerate investment in developing markets, building on the outcomes of the developing markets review recently completed-----
I must ask the Minister to stick to the time.
-----for the medium to long term.
I ask Deputy Troy to be brief. I want to be fair to other Members.
The Minister mentioned his plan for 2025, but that is for 10 million visitors and revenue of €5 billion. That is totally unambitious in the context of our position now. We need a new plan that takes on board the effects of Brexit. I compliment Tourism Ireland on the work it has done in the past. It is now ranked third in the world from a marketing perspective out of 141 countries by the World Economic Forum. I ask the Minister to consider what it has done as a company in marketing this country over recent years with a substantially reduced marketing fund. I welcome his commitment today to maintain the 0% landing charge at airports and his commitment to the 9% VAT rate for the hospitality sector but we need to see a greater level of investment in our marketing budget and our capital budget to ensure that when people come here, they have a good experience and there are things to see and do.
I thank the Deputy for acknowledging that we have a commitment to the tourism industry, particularly in the area of tax, specifically VAT and the air travel tax. I hope this commitment will remain intact for many years to come because I think its effect has been to increase tourism in this country, which will be increasingly necessary, especially in the situation in which we find ourselves because of Brexit. The Government's response to Brexit acknowledges that a number of key sectors will be impacted significantly, including tourism. To mitigate these risks, the Government is taking a five-pronged approach, as part of which we will continue to manage our economy and the public finances prudently to enable us to meet future challenges; negotiate effectively as part of the EU 27 with the objective of reaching an agreement that sees the closest possible relationship between the EU and the UK while ensuring a strong and well-functioning EU; and continue supporting business and the economy through Government measures, programmes and strategies.
