Tourism Industry

Deputy Richard O'Donoghue

What is the Government proposing to do to protect the tourism industry, which employs 10% of all workers? The 9% VAT rate was a godsend for many hotels. How will the Government protect them against gouging by electricity and gas suppliers, who are making it impossible for hotels to continue operating?

Deputy Jack Chambers

Businesses are facing cost inflation and other economic stresses, including rising costs in food and energy, increased wages in a competitive recruitment market and the cost of insurance. The aim in budget 2023 is to support the tourism industry to recover and grow in a sustainable way. A total of €214.762 million is being provided for tourism. We have secured €15 million in continued additional funding for overseas marketing of Ireland as a leading holiday destination. This includes €5 million to develop further a new tourism initiative aimed at stimulating international demand, namely, the Year of the Invitation. The budget contains an additional €15 million for a range of industry initiatives, including a €3 million fund for the continuation of investment in skills development and retention and a €2 million increase in funding for domestic marketing. We have also secured additional funding of €3 million for the hosting of American college football. Additional funding of €3 million was secured to allow Fáilte Ireland to continue its work in the area of sustainability. Other allocations include €36.5 million in capital funding for tourism product development in terms of the continued delivery of enhanced visitor experiences in line with the objectives of the National Development Plan 2021-2030.

As the Deputy will be aware, the Minister for Finance announced in Tuesday's budget a package to help businesses with escalating energy costs and to plan for the future. This included a temporary business energy support scheme, TBESS, providing qualifying businesses with up to 40% of the increase in electricity or gas bills up to €10,000 per month. It will be administered by the Revenue Commissioners.

I am conscious that the reduced VAT rate has been an important element of the business supports secured for the tourism and hospitality sector. Taxation is a matter for the Minister for Finance, Deputy Donohoe, and he has extended the reduction to February 2023. All measures and supports will be kept under review in the months ahead, given the current uncertainties in the market.

The hospitality and tourism forum, which is co-chaired by the Tánaiste and the Minister, Deputy Catherine Martin, is the appropriate arena in which to discuss issues with the industry and other key questions arising as the sector rebuilds.

Additional information not given on the floor of the House

The most recent meeting was held on 12 September 2022.

I am acutely aware of the importance of the tourism sector throughout the country. It is woven into the fabric of Irish cultural and social life and is critical to the regions. I will continue to work and argue for this important industry.

Deputy Richard O'Donoghue

The labour-intensive tourism and hospitality sector provides employment to more than 270,000 people, whose livelihoods depend on tourism. Some 70,000 of those people are directly employed in hotels. That figure had grown to 90,000 in 2018 and 2019 and the hotel industry was hopeful that it would return to pre-pandemic levels, when it generated €12 billion in revenue for the economy.

Consider the obstacles that the hotel industry overcame this year. There was a major surge in demand, amounting to 140% of pre-pandemic levels. The industry stepped up to the mark during the war in Ukraine when it provided 15% of its capacity under Government contracts. I believe that the figure has far exceeded 15%. What will happen next year when we have visitors from other countries? Will Ireland be full?

There is concern about the energy crisis. Since mid-summer, the hospitality sector has constantly requested a central point of information from the Sustainable Energy Authority of Ireland, SEAI, so that the sector might minimise its costs and update its information appropriately, but this has not happened. The SEAI has not done its job and provided a central point of contact for the hotel industry.

Deputy Jack Chambers

We are conscious of the increased costs for businesses as well as the tourism and hospitality sector's importance for employment. That is why a specific scheme has been developed and announced by the Minister for Finance, Deputy Donohoe, namely, the TBESS, which will provide businesses with up to 40% of the increase in electricity or gas bills up to €10,000 per month. It in this context that we want to support businesses with their increased energy costs.

The Minister, Deputy Catherine Martin, has secured specific funding to continue supporting the development of the tourism sector in 2023. Approximately €214 million is being provided to underpin and support the sector in terms of marketing and promoting and to fund the capital development schemes that Fáilte Ireland and many other agencies will progress across the regions, in which regard there will be continued progress next year.

Deputy Richard O'Donoghue

The hotel industry was accused of gouging. However, the Smith Travel Research, STR, report, which provides benchmarking and marketplace insight in a global hospitality industry monitor, stated that the average price of a Dublin hotel room during the high season was €187 and much lower throughout the country. It was definitely much lower in Limerick.

For a Fianna Fáil Minister to say publicly that the hospitality industry was guilty of gouging hurt the entire sector. I am glad to say the Tánaiste, Deputy Varadkar, corrected the record yesterday while speaking on the radio and said this was not a true reflection of what was happening around the country. It was definitely not happening in Limerick. For a Fianna Fáil Minister of State from Limerick to say the hotel industry was gouging meant he had not done his homework and he had just singled out the entire hotel industry.

One question the Minister of State might answer concerns the fact that more than 15% of our hotels, or well over that, have now gone in the context of the war in Ukraine. What are we going to do with visitors who will be coming in next year? What is going to happen to the businesses depending on these hotels having visitors coming in? Nearly 30% of our hotels are now full with people, and the Government wishes to take in more. The Government is going to destroy our industry and destroy Ireland.

Deputy Jack Chambers

It was important for us to have provided a humanitarian response for those who arrived from Ukraine. Thankfully, we have been able to provide accommodation and support for people when they arrive. It has been very important. I hope Deputy O'Donoghue is not suggesting-----

Tourism Industry

Thursday, 29 September 2022

Questions (4)

Richard O'Donoghue

Oral answers (42 contributions)