I move that the Bill be now read a Second Time.
The purpose of the Bill is firstly, to authorise an increase in the existing statutory limit on the aggregate amount which may be paid to Bord Fáilte for the giving of grants for the development of holiday accommodation, and secondly, to repeal the provision in the Tourist Traffic Act, 1959. which restricted payments to Bord Fáilte for grants for the development of holiday accommodation and major tourist resorts to a period of ten years from the date of the passing of that Act.
Provision was made in the Tourist Traffic Act, 1959, for the payment to Bord Fáilte of such sums not exceeding in the aggregate £500,000, as the Board might require for the giving of grants for the development of holiday accommodation. The limit of £500,000 was raised to £1.5 million by the Tourist Traffic Act, 1963, and to £3 million by the Tourist Traffic Act, 1966. The total amount issued to Bord Fáilte at 31st March, 1968, was £2,630,000 which left a balance of £370,000 in the authorised amount of £3 million. The amount to be voted in the present financial year is £800,000 and amending legislation is necessary to authorise payments in excess of £370,000 in the present financial year and to provide for payments in future years.
From the funds provided for the development of holiday accommodation, Bord Fáilte operate a scheme of grants to encourage the provision of additional holiday accommodation and the improvement of existing accommodation. Although reasonably good progress had been made in the provision of accommodation since the 1959 Act was passed, an investigation of accommodation requirements carried out by Bord Fáilte in 1965 revealed that a much quicker rate of growth was required to cater for the increase in tourist traffic. The board calculated that it would be necessary to provide 2,000 additional bedrooms each year up to and including 1970 of which 1,500 should be provided in registered hotels and guesthouses and 500 in supplementary accommodation.
As it was clear that the required rate of growth could not be achieved on the basis of the existing incentives, I authorised Bord Fáilte in April, 1967, to provide substantially increased incentives for the development of holiday accommodation. Prior to that date the general level of grants was of the order of 20 per cent. Apart from the fact that the level of the grants has been generally increased the scheme has been modified in the light of experience to provide for greater flexibility in the provision of financial assistance. Accordingly, Bord Fáilte are now authorised to determine, within certain specified maxima, the level of grant appropriate to each case taking account of all relevant factors including the location of the premises and the adequacy of existing accommodation in the area, the type of accommodation being provided, the price level, the market demand, the prospects of off-season business, the estimated cost of development and the background of the developer.
The current scheme of grants provides for the payment of up to 35 per cent of the total construction cost of new hotels in the western counties. In other remote areas the maximum grant is 25 per cent of total construction cost. Where the total construction grants do not apply, grants up to a maximum of 50 per cent of the cost of new hotel bedrooms are provided in the western counties and 40 per cent elsewhere. Grants up to 30 per cent are provided for dining areas, kitchens and stores in hotels in the West and 20 per cent elsewhere. There are also grants for hotel staff accommodation and for the provision of recreational facilities for hotel guests. Guesthouses in all areas are eligible for grants up to 20 per cent of the cost of new bedrooms, provided at least five guest bedrooms are available on completion of the project. Caravan and camping sites are eligible for grants up to a maximum of 50 per cent of the cost of site development and amenity works subject to a maximum grant of £20,000 per site. There are grants also for the provision and improvement of youth hostels and for improvement works in colleges and similar institutions providing accommodation for visitors during vacation periods.
The increase in the level of grants has resulted in an increase in the amount which has to be provided each year to Bord Fáilte for the purposes of the scheme. For instance, the amount provided in 1965-66 was £255,000; in 1966-67 it was £500,000; in 1967-68 it was £700,000, and in the present financial year the amount required to finance the scheme is £800,000.
Since the scheme was introduced in 1959 it has stimulated an investment of £15 million by private enterprise in holiday accommodation. The number of bedrooms in registered hotels and guesthouses has increased from 17,200 in 1960 to 24,000 in the present year, an increase of almost 40 per cent. There has also been a significant improvement in the standards of accommodation.
The increased incentives introduced in April, 1967, have had an immediate response from promoters. Figures available for 1st January, 1968, showed that there was a net increase of almost 1,300 bedrooms in hotels and guesthouses in 1967 although the increased grants were available for less than nine months of the year. Continued expansion and improvement of accommodation will be necessary to cater for the increasing number of tourists and there will be a particular need to cater for motoring visitors. The number of passenger-accompanied cars brought directly to ports in the State increased from 10,000 in 1959 to 68,000 in 1967. Bord Fáilte estimate that by 1970 about 150,000 cars will arrive directly and a further 100,000 through Six County ports.
The present range of grants will fall due for review in 1969 but there is no doubt that a continuation of financial assistance will be necessary to secure the required rate of expansion. Already a large number of projects are being planned for the coming years and Bord Fáilte anticipate that the target of 1,500 additional bedrooms in registered hotels and guesthouses will be achieved in each of the next three years.
I am accordingly proposing that the present statutory limit of £3 million for the giving of grants for the development of holiday accommodation should be increased by £2.5 million to £5.5 million. On the basis of information at present available this increase should be sufficient to provide for accommodation grants up to 31st March, 1971. I should explain that the purpose of this provision is to obtain the general approval of the Oireachtas for the financing of the accommodation development scheme. The amount to be provided each year will fall to be voted by the Dáil in the normal way under the Vote for the Department of Transport and Power.
Although there has been a substantial increase in registered hotel and guesthouse accommodation since 1960 —from 17,200 bedrooms in 1960 to 24,000 in the present year—the increase in supplementary accommodation has been more significant. The number of bedrooms in supplementary accommodation included in Bord Fáilte lists increased from 815 in 1960 to 8,400 in the present year. The increase in A* and A hotel bedrooms has been 68 per cent in this period; in other accommodation the increase has amounted to 82 per cent.
In addition to providing for an increase in the statutory limit on the amount to be provided for the development of holiday accommodation the Bill also contains a provision to repeal a restriction contained in the Tourist Traffic Act, 1959, which limited the payment of funds for the development of holiday accommodation and major tourist resorts to a period of ten years from the date of passing of that Act. I consider that the annual debate on the Vote for my Department and the fact that legislation is required every two or three years to authorise an increase in the aggregate amount provides sufficient control over the administration of the scheme without imposing a specific time limit.
The ten-year limitation applies not only to payments for the development of holiday accommodation but also to payments for the development of major tourist resorts. The aggregate amount to be provided for the development of major tourist resorts was increased to £3.25 million by the Tourist Traffic Act, 1966. The total amount issued at the 31st March, 1968, was just over £1.5 million. As the amount being provided in the current financial year is £400,000, it is now clear that there will be a considerable balance remaining in the authorised amount of £3.25 million at the expiration of the ten-year period in August, 1969. It is intended to undertake a second programme for the development of major tourist resorts when the works at present in hands have been completed and, in the circumstances, I have no doubt that Deputies will agree to the removal of the time limitation so that the major resort development scheme can be continued after August, 1969.
The further development of the tourist industry depends to a very great extent on the availability of an adequate supply of holiday accommodation. There are good grounds for believing that the incentive scheme now in operation will achieve the rate of growth required to cater for the anticipated increase in demand. It is equally important that the major resort development scheme should be continued. Bord Fáilte are at present embarking on a policy of promoting year-round tourism and the development of this policy will give rise to an increasing demand for entertainment and recreation facilities.
There is no need for me to remind Deputies of the importance of the tourist industry to the national economy. Since 1959 the income from tourism and travel has risen from £39.4 million to £84.3 million in 1967. During the period of the Second Programme for Economic Expansion tourist income at constant money values rose at a rate of 5.5 per cent a year. I am confident that this rate of growth can be maintained and possibly increased provided the necessary resources and facilities are made available. The purpose of this Bill is to enable these resources to be made available and I accordingly confidently recommend the Bill for the approval of the Dáil.