Vol. 544 No. 1
74 Mr. O'Shea asked the Minister for Tourism, Sport and Recreation if his attention has been drawn to the crisis in the tourism industry which faces a fall of 550,000 in the visitor numbers in 2002 with the potential loss of 14,000 jobs; the action the Government intends to take to avert another disastrous year for the industry; and if he will make a statement on the matter. [27867/01]
75 Mr. Naughten asked the Minister for Tourism, Sport and Recreation when he last met with Bord Fáilte to discuss the crisis in the tourism sector; and if he will make a statement on the matter. [27866/01]
I propose to take Questions Nos. 74 and 75 together.
No official estimates are as yet available in relation to the loss of tourism business arising from the tragic events of 11 September 2001. However, while it may still be too early to assess the overall impact on international travel patterns, it is clear that the terrorist attacks will impact on visitor numbers to Ireland, in particular from America, for the balance of this year and into 2002, probably leading to the first annual decline in visitor numbers for a decade.
Bord Fáilte has been working on revised estimates for tourism performance in 2001 although it has been difficult to come up with accurate revised forecasts given the varying experiences from the carriers and uncertainty over the nature and duration of the international response to the terrorist attacks. The situation has been further complicated due to the American Airlines crash on 12 November. In the latest edition of its Link magazine, circulated to members of both Houses of the Oireachtas, Bord Fáilte forecasts an overall reduction in visitor numbers in 2001 of between 6.5% and 10%. This is equivalent to a reduction of between 420,000 and 598,000 visitors, representing foreign revenue earnings of £168 million, €213 million; and £233 million, €296 million, respectively. However, on the positive side, according to industry sources the past two months have witnessed a particularly robust performance in the domestic market and hopefully this will continue into next year.
During the launch by Tourism Ireland Limited – the new all island tourism marketing company established under the Good Friday Agreement – of its 2002 marketing plans on 7 November, the company forecast a best case scenario for 2002 which envisaged a return to close to 2000 visitor levels. This assumes a speedy conclusion to military retaliation, non-recurrence of foot and mouth disease and no further reduction in access routes and capacities.
Since the tragic events of 11 September, officials of my Department have met with senior management of both Bord Fáilte and Tourism Ireland Limited on a very regular basis. I have been in regular contact with the chairman, the acting chief executive and senior executives of Bord Fáilte and with the chairman and chief executive of Tourism Ireland Limited to review developments. I also met a high level delegation from the Irish Tourist Industry Confederation on three separate occasions since 11 September, to take stock of the situation and to discuss appropriate responses. Critical factors in dealing with the crisis include not only the nature and duration of the response to the terrorist attacks but also the speed with which public confidence in air travel can be restored. Unlike the foot and mouth disease crisis, which to some extent was within our own control, there is very little that Ireland can do to influence current international events.
At my request, Bord Fáilte and Tourism Ireland Limited have urgently re-examined, in consultation with the tourism industry and through the tourism marketing partnership structure, their respective marketing programmes and plans for the remainder of 2001 and 2002. Bord Fáilte subsequently announced details of a £750,000, €952,500, programme of additional immediate measures for the British, Irish, French and German markets and have recently circulated to the trade and other interested parties, and to members of both Houses of the Oireachtas, comprehensive details of their full £3.5 million, €4.4 million, autumn programme. Following recent contacts with ITIC, and again at my request, Bord Fáilte has introduced further marketing actions in Britain, Northern Ireland, the US and domestically for the balance of the year at a further cost of £400,000, €507,900.
Meanwhile, the new chief executive of Tourism Ireland Limited, Mr. Paul O'Toole, spearheaded the review of marketing plans for 2002 which culminated in the launch on 7 November in Dublin and Belfast of marketing plans for 2002 and details of a new and exciting television and print international advertising campaign for the island of Ireland, developed at a cost of approximately £4 million, €5million.
Additional informationNew fulfilment literature and market books have been prepared and will be available for the first time ever on an all island basis. The plans for 2002 will be flexible in nature to take account of the changing circumstances arising from the events of 11 September. Particular importance is attached to the partnership approach with industry and there has been extensive consultation, including two meetings of the tourism marketing partnership, in the drawing up of these plans.
When I met with the ITIC delegation, one of their key priorities was that Tourism Ireland Limited would be fully operational in time for the 2002 marketing season. I am glad to report that Tourism Ireland Limited is fully on track to take over full responsibility for international tourism marketing activity on an all island basis next year. The new company will have a programme budget of £21 million, €27 million, for 2002 which will be supplemented by niche and product marketing funding from Bord Fáilte and the Northern Ireland Tourist Board.
The Government is very conscious of the important link between competitive air and sea access and tourism flows. We are particularly well served by the levels of investment in recent years in sea access which has seen the emergence of a high quality and competitive route network, in particular across the Irish Sea. We are acutely aware of the important contribution which Aer Lingus has made to developing tourism traffic over the years, most recently through the extension of their transatlantic network. The priority from a tourism perspective therefore, is the maintenance, as part of the survival plan for the airline, of as much of the pre-11 September service network as possible going into the 2002 season. My Department has been working closely with the Department of Public Enterprise to safeguard as much of the route infrastructure as possible so that, when the recovery comes, we are best placed to avail of it.
The Government is also anxious to promote new air route development, in particular from the large continental European market which has not performed up to expectations in recent years. The recent announcement that Aer Rianta has expanded its incentive scheme for new routes to Dublin, Cork and Shannon Airports is to be welcomed. An interdepartmental group, under the chairmanship of the Department of the Taoiseach and involving representatives of my Department, has been established to look at the interaction between access transport, particularly by air, and tourism with a view to identifying further possibilities for increasing the flow of visitors to Ireland. That work is advancing and I am hopeful that there will be a positive outcome soon.
The Government has allocated significant funding towards tourism development since coming into office. Under the national development plan, a total of £350 million, €444 million, has been earmarked for product, marketing and human resource development. The first ever multi-annual tourism marketing fund has been established with a commitment of £150 million, €190 million, over seven years.
This year, the total Exchequer tourism budget is of the order of £90 million, €114 million. We must ensure that this funding is used in the most effective manner to help address the real development needs of the industry in order to sustain foreign revenue earnings and employment levels. The destination tourism marketing budget of £21 million, €26.6 million, at the disposal of Tourism Ireland Limited in 2002 represents the largest ever budget available for the attraction of international visitors to the island of Ireland.
Given the more challenging environment which we are now facing, I believe that it is vitally important to quickly bed down the process of institutional change now under way in the tourism State agencies which have remained unchanged in structure since the early 1960s. It is important to complete the start-up of Tourism Ireland Limited so that it is fully operational for the year 2002 marketing season. I also welcome the support of the council of CERT and the board of Bord Fáilte for the proposed creation of a new national integrated tourism development authority. This initiative also has the support of industry. I will be asking Government very shortly for approval to proceed with the creation of the new body which will require new legislation. The objective is that we have strong structures in place to implement our medium-term plans for international marketing, product and human resource development as contained in the national development plan in order to help the tourism industry to meet the undoubted challenges that lie ahead.
I thank the Minister for that comprehensive reply. He made the point that there has been a robust performance in the hotel sector in the past two months but that is primarily because of rates being offered that cannot be sustained. This robust performance is not something that is set to continue. Does the Minister agree that the figures he has given us correspond, more or less, with the figures for 2002 forecast by the Irish Hotels Federation? What is his personal response to the five-pronged package of measures that the Irish Hotels Federation is seeking to have put in place? That package involves the development of the British and European market, the nurturing of the American market, a reduction in local authority and VAT rates and programmes in terms of the environment and transport.
What exactly is happening in relation to transport into Ireland? In the aviation sector there has been a large reduction in the number of seats but I know the Minister has been trying to encourage people to travel to Ireland by ferry. What is the spare capacity in the ferry sector at the moment and what investigations has he carried out as to what additional capacity can be introduced?
The industry has claimed that there could be a reduction of up to 600,000 people travelling into the country. I accept that there will be deficits and problems, particularly in 2002. However, thanks to the tremendous response of the domestic market and to measures taken by the industry itself, such as extra offers, October has been a buoyant month. Another factor contributing to that was the fact that with decommissioning Ireland is regarded as a safe island. I do not say that this buoyancy will continue but that there are reasons for it and thanks to the initiatives October has been buoyant.
I am quite aware of the problems facing the industry in 2002. We set out our plan on 7 November through Tourism Ireland Limited. We had originally planned the launch for 7 November and after reassessment and refocussing we were still in position to announce the plans for 2002 on that day. We put the extra funding into the markets, particularly the British market where statistics have shown that up to one million UK visitors have given up on taking holidays this year and we are refocussing on areas such as the European market.
I explained previously that local authority and VAT rates are not a matter for me. The Deputy should put a question down for the relevant Minister.
What is the Minister's personal view on the subject?
VAT and rates receipts are totally different in the UK than they are here and statistics from the UK have shown that very few people availed of those measures during the foot and mouth disease. On transport, we have lost 25% capacity on the transatlantic route. The 1.1 million American passengers we carried last year were worth £570 million to the Irish economy. Those are huge figures. Americans make up one sixth of visitor numbers to this country but they make up 25% in foreign revenue terms.
Aer Lingus has done a tremendous job on the transatlantic route over the past number of years and we are doing our utmost to ensure that no further gateways or access points from the United States are closed. We are trying desperately to encourage Americans to keep coming here. We have announced a number of new initiatives, through Bord Fáilte, the industry, carriers and car rental firms, to try to get Americans to overcome their fear of flying. I am surprised at the number of Americans who are currently travelling, thanks to the initiatives taken by airlines, including reduced fares. This can only last for a short time because it would not be profitable to continue. We are trying to persuade Americans to overcome their fear of flying.
There are also opportunities in Europe. I have talked to a number of people who have businesses in countries such as Morocco, Egypt and Turkey and who tell me they have had between 40% and 60% cancellations from northern Europe since 11 September. The recent decommissioning of weapons by the IRA will cause many Europeans to regard Ireland as a safer destination and northern Europeans are coming to Ireland for niche activities such as golf. I hope they will refocus on Ireland. We will refocus on the European market and try to attract these visitors. Ireland is a safe country and if we do our marketing properly we should attract more European tourists next year than heretofore.
I would not have believed the Minister could squeeze so much into a minute.
In his response to Deputy O'Shea, the Minister accepted that there will be a deficit in the tourism figures for 2002. In his initial response he said that Tourism Ireland estimates that figures will be back up to 2000 levels in 2002. There seems to be a contradiction between the Minister's position and that of Tourism Ireland. Can he elaborate on this? Does the Tourism Ireland figure take into consideration the current downturn in the Irish economy and the effect of the airline accident on 12 November?
Does the Minister believe there is a need for co-ordination between Tourism Ireland and the various other marketing organisations, such as Heritage Ireland and Houses and Castles of Ireland, rather than each organisation promoting its own sectional interest?
Has the Minister discussed with Tourism Ireland the possibility of flexibility with regard to grants paid for the development of various sectors? For example, one of the conditions attached to the great gardens of Ireland grant is that a full-time gardener must be employed. Many of these gardens are small and due to the this year's downturn in tourism find it uneconomic to employ a full-time gardener. Tourism Ireland is not taking a flexible approach to this matter and has asked recipients of grants to ensure the gardener is paid or return the grant.
The figures quoted assume a best case scenario. A return to the 2000 figures by 2002 is the best we can hope for. It is estimated that tourist numbers in 2001 will fall by between 6.5% and 10%. The tourism industry was recovering from the effects of foot and mouth disease and foreign tourism revenue for 2000 was up by 15%. The industry was beginning to recover before 11 September.
I call the next question.
I tabled an oral question and I believe I am entitled to an answer. I have not had an opportunity to ask a second supplementary question.
We are over the time for this question. Deputy O'Shea will not have an opportunity to ask a second supplementary question either.
With respect, Sir, I believe I am entitled to an answer.
You are not entitled to contravene Standing Orders.
A similar question has been tabled later. I will omit most of the answer to that question because much of it is repetitive. Perhaps the Deputy may ask his supplementary question then.
