asked the Minister for Trade, Commerce and Tourism the steps he proposes to take this year to maintain the tourist industry's competitiveness in relation to other destinations; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Tourist Industry.
6.
I would point out that Board Fáilte have been provided with a current expenditure allocation of £21.258 million in 1983 as a means of assisting the tourism industry and of contributing towards maintaining its competitive position. This provision represents an additional £3.131 million on the board's 1982 allocation and gives a substantial increase in real terms for tourism promotional activities.
The recent Finance Bill has also provided for a reduction in the VAT rate chargeable on accommodation provided by hotels, guesthouses, hostels, holiday camps, motels and camping sites from 23 per cent to 18 per cent from 1 May 1983. In addition, the Government have cushioned other sectors of the industry by exempting them for this year from the 5 per cent VAT increase in respect of services provided to non-residents under fixed price contracts entered into before 1 January 1983.
I can assure the Deputy that I will continue to monitor this situation and to explore means by which further measures to assist competitiveness might be possible in the future within the context of the government's overall budgetary strategy.
I only wish the Minister could have found it possible to outline some of the measures he says it might be possible to introduce to help this ailing industry in a crisis situation at present. Is the Minister aware that of the 700 hotels operating in the country, half of them lost money last year? Is he aware also that there is grave danger that of the 26,000 people employed in the industry, 3,000 will not be in employment at the end of this season? Will the Minister tell me what he proposes doing about that?
I am well aware of the problems confronting the tourist industry. Indeed, some of them are not of recent origin but rather have been with the industry over a period. In addition to the reduction in VAT, I have indicated to the House the increased moneys provided by the Exchequer this year to the tune of £3.1 million in order to assist hotels in an intensive promotional campaign extended primarily to the British market, which element had shown such a massive decline in our tourist earnings. This campaign commenced very early in the year. Indications to date are of a very substantial increase in inquiries, which is a good indicator that the intensive campaign processed by Bord Fáilte in Britain and on the Continent will prove beneficial to our hotel and tourist industry generally.
Would the Minister indicate what the Bord Fáilte estimate for growth rate in the industry will be this year and what the total revenue is expected to be?
Any indication at this stage would be purely theoretical because late bookings are a feature of the industry now. Late bookings are the current tendency. All we have to go on is that inquiries are substantially up and Bord Fáilte's statistical review at this stage would indicte a growth of four per cent on the 1982 figure.
One final supplementary. This is a very important matter when one considers that it is accepted and even agreed by the Minister that thetourist industry——
A question, Deputy.
——and the hotel industry are in a state of crisis and are bound to disintegrate ——
A question, Deputy.
(Interruptions.)
I can appreciate the Minister coming to the defence of the Minister of State but the Minister of State is on record as recognising there is a crisis——
Deputy, a final question.
Would the Minister or the Minister of State tell us what promotional activity he intends to engage in to counteract the franc situation so far as currency restrictions are concerned?
I can assure the Deputy that the problems of promotion have involved very active participation by my Department since both the Minister and I took responsibility for tourism. With the additional funds provided by the Exchequer Bord Fáilte have been doing a tremendous job of work and are in close discussion and involvement in relation to the French economy and the French Government.
I put it to the Minister that he has washed his hands of the tourist industry, an industry which generated £760 million to this economy last year.
A question, Deputy.
Might I make a point that might be helpful?
No. We are moving on to the next question.
It is time he and his Minister took serious note of the position of the hotel and tourist industry. Obviously they have washed their hands of both.
(Interruptions.)