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Dáil Éireann díospóireacht -
Wednesday, 24 Mar 2010

Vol. 705 No. 2

Tourism Industry: Motion (Resumed).

The following motion was moved by Deputy Olivia Mitchell on Tuesday, 23 March 2010:
"That Dáil Éireann:
recognising:
tourism revenue dropped by €1.1 billion in 2009 to €5.2 billion, its lowest level since 2004;
overseas visitor numbers fell by close to 1 million in 2009 compared with 2008;
Ireland's largest tourism market, the United Kingdom, declined by 16% in 2009;
access to Ireland has become worryingly restricted with the ongoing removal of routes and a reduction in airline capacity at both Shannon and Dublin airports; and
the serious credit flow crisis and level of debt facing the sector as a result of the economic downturn;
considering:
the introduction of an air travel tax was short-sighted, counterproductive and a deterrent to the survival of the tourism industry;
the fragmented nature of this indigenous industry and the lack of economic priority afforded to it by the Government;
the significant burden of local authority rates, Government charges and energy costs on small businesses;
the archaic nature of the joint labour committee wage-setting system;
the administration cost and complexity of Irish visitor visas;
the failure of the Office of Public Works to exploit the full tourism potential of visitor attraction sites;
the Government-generated shortage in the supply of cars for the rental market; and
the emergence of "zombie hotels" and the financial pressure this is placing on the hotel sector;
calls on the Government to immediately abolish the air travel tax."
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"—notes the unprecedented reduction in international economic growth and disturbances in financial markets over the last two years and the impact this has on all sectors of the Irish economy;
commends the Government for its policies to return stability to the public finances, which is helping to restore confidence both internationally and domestically;
commends the approach taken by Government on the appropriate balance struck between revenue raising measures and necessary expenditure reductions in its response to dealing with pressures on the public finances;
notes the positive reaction that the Government's prudent and decisive approach has engendered in international economic commentators and the tangible positive impact of lowering the interest cost of servicing Ireland's national debt;
notes the need for ‘fairness' to be at the core of any revenue raising measures required to shore up our public finances;
considers that the impact of the air travel tax on tourism has been considerably overstated in the context of overall purchasing decisions by visitors; and
commends the actions which the Government and the Irish tourism industry are taking, both together and independently, to respond to these challenges, including:
the continuing commitment of the Government to the progressive delivery of its key tourism investment priorities in marketing, skills development, enterprise support and product development, within a framework of sound public finances and value for money, noting that the tourism services budget was increased in 2010 by 2% to over €150 million, against a background of fiscal retrenchment;
maintaining the level of overseas marketing activity in real terms, led by Tourism Ireland and supported by industry partners, investing €26 million in a marketing drive in the first half of the year, including the biggest ever programme of activities to showcase Ireland during the St. Patrick's Day period;
Fáilte Ireland's new advertising and promotional campaign to encourage holidaying at home this year, with a budget of €4 million, rooted in extensive consumer research and consultation with the tourism industry, in particular by promoting the great value that holidaying in Ireland offers to the consumer;
Fáilte Ireland's support for enterprises, helping them to achieve real cost savings and efficiencies and providing a range of training and business supports to individual tourism businesses, investing over €11 million in 2010 in the form of direct supports and advice;
the role of the Office of Public Works in the conservation, protection and management of the built heritage and its pivotal contribution to the sustainable development of tourism in Ireland; and
other significant developments this year which will assist the tourism sector such as the opening of the new Convention Centre Dublin in September which is expected to give a major boost to business tourism, the new Aviva Stadium and the completion of the inter-city motorway network."
—(Minister of State at the Department of Transport, Deputy Seán Haughey).

I wish to share time with Deputy Jan O'Sullivan.

Is that agreed? Agreed.

I am delighted to have an opportunity to speak on the critical topic of Irish aviation and tourism. I commend Deputy Mitchell and her Fine Gael colleagues on proposing this motion and highlighting the crisis in the global and Irish travel and tourism industries. As the motion emphasises, there has been a staggering decline in passenger numbers and tourism revenue in the past year. Air travel with the UK, which is our closest neighbour and most important tourism market, haemorrhaged more than 700,000 passengers between February 2009 and February 2010. This 14% decrease followed a 17% decrease in passenger numbers in January. There have been worrying slumps in air traffic between the UK and Kerry, Shannon, Cork and Dublin airports. The Kerry-Stansted route, for example, has had its service levels slashed over the winter period. It saw an incredible 54% decrease in passenger numbers, to just under 4,500 passengers, in the period between February 2009 and February 2010. It is estimated that if these trends continue throughout 2010, passenger traffic between Ireland and the UK will reach its lowest level since 1999, with a decrease of 1.75 million in passenger numbers to 9.15 million.

Aer Lingus recently posted operating losses of €81 million for 2009. The extraordinary job losses in the tourism and hotel sectors have been accompanied by major job losses in the aviation sectors. Some 1,100 jobs were lost at SR Technics and a further 400 were lost at the Dublin Airport Authority. I spoke this afternoon about the 500 job losses at Ryanair. Discussions on significant job losses at Aer Lingus are ongoing, but it seems that up to 600 jobs may be lost. The Government's apathy about protecting the high-skilled and high-quality aviation, engineering and maintenance jobs at SR Technics has been one of the most shocking features of its period in office. It has been compounded by the Government's attitude to aviation and travel taxation. As an island nation, our air and marine connectivity is critical to getting tourists and visitors in and out of the country. Rather than making it easier and more attractive for people to visit this country, the Government's big idea for supporting the ailing travel and tourism sector has been to slap an extra €10 air travel departure tax on everyone travelling through an Irish airport to airports 300 km from Dublin Airport. This was introduced as Governments across the EU — including those in the Netherlands, Belgium and Spain — moved to abolish similar departure taxes. It is even more galling that none of the revenue from the travel tax is being used to support aviation facilities, security and safety services or infrastructural development.

I congratulate the Minister of State, Deputy Cuffe, on his promotion. Since the introduction of the air travel tax, I have consistently asked the Ministers for Finance and Transport to publish the cost-benefit analysis that was carried out by the Department of Finance before its introduction. So far, however, neither Minister has given me any information in this regard. The suspicion remains that the tax was worked out on the back of a beer mat as a means of generating some easy cash for the Government rather than as a means of dealing with the issues affecting Irish aviation. The paltry economic analysis that was provided by Ministers in budget 2009 estimated that the new tax would yield €95 million in 2009 and €150 million in a full year. However, no estimate of the potentially negative knock-on effects and costs of the tax was provided. I refer to its effects on passenger numbers, aviation jobs and employment in the tourism and hotel sectors. It is incumbent on the Ministers, Deputies Brian Lenihan and Dempsey, to place a full cost-benefit analysis of this tax before the Oireachtas. If they cannot do so, they should abolish it.

The manner in which this tax has united opinion across the aviation industry is striking. Aer Lingus, Ryanair and CityJet, which account for 83% of the total number of passengers who depart this island each year, jointly commissioned an independent analysis from Amsterdam Aviation Economics, which is part of the SEO economic research group. The critical conclusions of the report were that the introduction of the air travel tax will cause estimated revenue losses of up to €482 million; that it will lead to up to 3,000 direct job losses; and that, in a full year of operation, it will bring about a reduction of up to 1.2 million the Irish aviation industry's number of departing passengers. That is balanced against an Exchequer tax take of just €116 million. The report states:

If airline capacity in 2009 had been maintained at 2008 levels and the ATT was to be passed on in full to passengers in the form of higher fares, it is estimated that the total resulting demand reduction would be between 0.5 and 1.2 million departing passengers over the first full year based on a price elasticity range of between –0.5 and –1.5. On thisbasis . . . . ATT revenue would be between €117 million and €124 million but total revenue losses for airlines, airports and the tourist sector would range from a minimum of €210 million up to €465 million, dependent on the elasticities assumed.

I drew up a rough estimate when the travel tax was introduced in the budget by the Minister of State's colleague. It was clear, at a glance, that the cost of this tax would be definitely far higher than its yield.

This stupid tax should never have been introduced. I note that the Minister of State, Deputy Cuffe, has been given responsibility for looking after sustainable transport. I accept that certain issues associated with aviation transport will have to be addressed, in time. This air travel tax is not the right way to address such issues. It is a stupid device that has resulted in serious job losses. No matter how one looks at it, the tax will result in further job losses in the future. The Government will not give the House a cost-benefit analysis because it does not have one. The Minister of State's colleagues in the Department of Finance did not draw up such an analysis. It does not exist. On any basis, the travel tax should be withdrawn. I support the motion and urge the Government to forget about this tax. I asked the Taoiseach a few weeks ago to ensure the Minister for Finance uses the Finance Bill 2010 to withdraw it. That should be done at the earliest opportunity. It is very damaging for our country.

I thank Deputy Broughan for sharing his time with me. I commend Deputy Mitchell on her tabling of this motion. This tax is having a serious effect on tourism in Ireland. I would like to speak particularly about the mid-west, as it is having an extremely worrying effect on passenger numbers at Shannon Airport. The airport has lost more than 1 million passengers in the past two years. There is a serious danger that this airport, which is of vital infrastructural importance to the mid-west region, will become unsustainable.

I congratulate the Minister of State, Deputy Cuffe, on his elevation. I think he has some understanding of the importance of having integrated policies that deal with regions as a whole, rather than separate policies that deal with various areas differently. The Government has no aviation policy whatsoever. We need integrated thinking in this regard. If we allow Shannon Airport to go down the tubes, the prosperity of an entire region will be put in jeopardy. The travel tax can be directly implicated in the threats to the airport to which I refer. Ryanair may be bluffing when it directly blames the tax for its decision to withdraw certain routes from Shannon. The Government should call Michael O'Leary's bluff. The maintenance of existing flights is vital for the mid-west region.

This issue has been highlighted by many experts, who have indicated that a travel tax is a negative feature of any country. As my colleague, Deputy Broughan, has said, the Dutch and Spanish authorities, inter alia, have withdrawn travel taxes because of their effects on tourist numbers. We cannot view airports as stand-alone pieces of infrastructure that do not have any effect on the regions in which they are located. We need joined-up thinking and joined-up Government. I do not have much faith that the Ministers, Deputies Dempsey and Brian Lenihan, have a real understanding of this issue. I hope the promotion of Deputy Killeen, who represents the constituency of Clare, to the Cabinet will improve the Government’s understanding of the importance of the issue. I expect that the new Minister for Tourism, Culture and Sport, Deputy Hanafin, also has some understanding of the region about which I speak.

We need the Government to examine the overall effect of this tax, rather than to consider it within the narrow confines of the Departments of Transport and Finance. As Deputy Broughan said, this crude measure was introduced simply to bring in some more tax revenue. It is entirely counter-productive in its effect on the economy in general and on certain vulnerable regions in particular. I suggest that the mid-west region is extremely vulnerable in this context. There were suggestions in the media earlier this week that a plan is being hatched by the Dublin Airport Authority whereby some type of direct payment would be introduced in substitution for the travel tax for passengers at Shannon Airport. I do not know whether these reports are accurate, but there is no point in simply replacing one tax with another tax imposed directly on passengers. Nor is there any point in the DAA making plans for Shannon Airport behind closed doors, with no consultation with people in the region.

There must be an adequate and concerted Government response to the threats that exist. I speak both for my own region and for the entire tourism industry. If we could attract even a small percentage of tourists from the various regions throughout the world where tourism is increasing — I have in mind eastern tourists in particular — it would make a great difference to the economy, to the many ailing hotels and to the many good tourist service providers who are struggling. That effort must be made. It will involve action in the area of marketing and many other aspects. First and foremost, however, this tax is a strong counter-incentive to people to come to this country. That problem must be addressed urgently.

I propose to share time with Deputies Michael Kitt, Cyprian Brady, Niall Collins and Frank Fahey.

I welcome the opportunity to contribute to this debate. I congratulate the Minister of State, Deputy Ciarán Cuffe, and wish him well in his portfolio. The Fine Gael motion informs us that visitor numbers to Ireland decreased last year, and nobody is denying that. However, that decrease is not a result of the travel tax, which is a departure tax and applies to flights out of the country.

Visitors must pay the tax on their way home.

I am surprised that Deputy Olivia Mitchell seems to be confused in this regard. Another government will charge those passengers on the way home. Let us deal with the facts. Mr. George Lee's departure from the Dáil must have made Deputy Mitchell a little too relaxed. We are talking about a departure tax that is charged at Dublin, Shannon, Cork and Belfast.

Is Deputy Kennedy proposing that tourists should stay in Ireland forever to avoid the tax?

If one comes back from London, it is the British Government which imposes the charge, not the Irish Government. We must get the facts right.

Visitors to this country will face the charge when they return home.

I consulted a website yesterday and discovered that the minimum price for two people travelling to Spain would be €1,000. Are Fine Gael and the Labour Party suggesting that an additional €10 charge will deter people from embarking on a sun holiday? I am unconvinced.

Deputy Kennedy should ask Aer Lingus about it.

We are talking about a departure tax that raised €100 million in ten months last year. The anticipated revenue for 2010 is €125 million.

How much has it cost the State?

In the context of a budget deficit of more than €20 billion, every €100 million we can raise is very welcome.

Why have other countries abolished similar charges?

Deputy Kennedy should be allowed to continue without interruption.

The United Kingdom, France, New Zealand and Australia have departure taxes at a much higher rate than we have. We must deal with reality.

One can understand why airlines that want to offer zero-cost flights would call for the removal of the departure tax. However, those airlines that are charging €40 for personal check-in, €5 for the privilege of an on-line check-in, €5 for credit card payment and so on should look first at these charges, which are imposed directly on consumers. Claims by such airlines that the €10 departure tax impacts in any way on their business do not stand up. They must begin by examining their own charging structures.

The Government is very much aware that the tourism industry has a turnover of more than €5 billion and employs more than 200,000 people. As such, we have allocated an increased budget for tourism, even allowing for current fiscal restraints. It is a vital industry the development of which we must support. I welcome the appointment of the Minister, Deputy Mary Hanafin, to the new Department of Tourism, Culture and Sport. Work must be done in the area of built heritage and so on, which can attract significant tourism to Ireland. I am confident the Minister, Deputy Hanafin, will see to it that tourism will continue to grow as an indigenous business.

I congratulate the Government on the appointment of the esteemed actor, Mr. Gabriel Byrne, as cultural ambassador of this country. That will afford us greater recognition on the international stage and encourage visitors who might not otherwise have considered Ireland as a holiday destination. Last week's St. Patrick's Day parade in Dublin was a fantastic spectacle. We hope the many visitors who came to Ireland for the celebrations will return home with a positive impression of what the country has to offer. In terms of Government investment in tourism, the convention centre which is expected to open next September will be a massive boost for tourism revenue potential. The spend per person for the type of visitor the facility will attract is way above that of the average tourist.

As I said, I am surprised that Deputy Mitchell has put forward a motion calling for the abolition of the airport departure tax, for which she blames falling passenger numbers. She seems to have got her facts wrong; perhaps it is the George Lee factor. I ask that she be more careful the next time she tables a motion.

Thanks for the advice.

I join colleagues in congratulating the Minister of State, Deputy Ciarán Cuffe, on his appointment. As Deputy Kennedy observed, the air travel tax raised €100 million over a ten-month period and is expected to bring in €125 million in a full year. That is a sizeable sum. Other countries in the European Union, namely, the United Kingdom and France, as well as Australia and New Zealand also have a travel tax in place. However, I welcome the reduction in the tax to €2 on shorter journeys. This means all Irish departures to locations such as Manchester, Liverpool and Glasgow are subject to the lower rate.

Low-cost travel has been good for Ireland, and I commend all those who pioneered progress in this area. However, we should be concerned that airlines are reducing routes globally, regardless of what taxes apply. We must promote travel and tourism to this country. Visits to Ireland by non-residents were down by some 11% between January 2009 and June 2009 compared with the same period in 2008. There always will be pressure to raise revenues. When I was Minister of State at the Department of Foreign Affairs in 2007 and 2008, there was always pressure from the Department Finance to increase the price of a passport, for example. That proposal was resisted but the increase was eventually introduced. Our decision to waive the charge for those in receipt of a State pension was very welcome. I spoke to people today who are concerned about getting their passports renewed in view of the action by union staff. The charge for emergency passports remains at €50, but if people could get as far as the counter they would be glad to pay it and would have little concern about a travel tax. That is the situation but it begs the question as to why we have only two passport offices in Cork and Dublin. There are people from Galway contacting the Cork office to get a passport and there is a need for two extra offices in the west and the north west to process passport applications. I raised this issue as a Minister of State in 2007 and I do not believe it would be too expensive to provide these offices. It would save people long journeys if they were able to apply in their own region for a passport, which could be provided at regional airports. I have lobbied the current Minister for Foreign Affairs on this and I hope he makes further progress on it.

I congratulate the Minister, Deputy Mary Hanafin, on her new ministerial appointment. There is great tourism potential and she is a capable person who will deliver on that potential. I cannot understand why the Office of Public Works is being criticised in the Fine Gael motion because the OPW has marvellous heritage sites. Most of them will open earlier this year and the admission prices will be at the 2009 level, which I welcome.

A balance must be struck between raising revenue and reducing spending, due to the current pressures on the public finances. We have to market this country properly overseas, as Tourism Ireland has done. It did a great job for St. Patrick's Day and the fact that it fell on a Wednesday meant that we could have a longer festival. Fáilte Ireland must also be commended for a programme that encourages people to holiday at home. I hope we will get good value for consumers in Ireland. We have a lot to offer in this area and it is important that Fáilte Ireland is supported.

I look forward to the opening of the new convention centre in Dublin and the new Aviva stadium in Ballsbridge. Our Oireachtas committee went out there to see the work that was going on during the construction of these facilities.

It is encouraging to see that we are spending more money in the Department of Arts, Sport and Tourism this year. There has been a 2% increase on the 2009 figure, and it is important that this €153 million funding is spent wisely. We have to promote major visitor attractions and the infrastructure for areas that have not been developed in the past, such as recreational cycling, walking, water-based activities and heritage attractions. The campaign by our tourism organisations should promote these areas and outline what can be done. A total of €44.25 million has been provided for tourism marketing in 2010 and this will increase the investment in the overseas marketing of Ireland. I hope we can get value for money in obtaining advertising space and show what can be done to promote the country.

I welcome this debate tonight. I congratulate the two Ministers mentioned and I hope we have a good tourist season in 2010.

I welcome the opportunity to contribute to this debate. I congratulate the Minister of State, Deputy Cuffe, on his elevation. I think he will be very suited to his new position.

We have spent much resources over the last few years on building up our tourism product here. In the areas of training and education, hospitality services, hotel management and so on, we have managed to build up a product that is seen as being very unique and attractive. This did not happen by accident. Much planning went into producing the product and making sure that it was sold properly around the world. We have managed to do that.

The successful growth of the tourism industry in Ireland has been phenomenal in the past ten years. The fact that we are in a global recession has hit us harder than many other countries. Ireland is a small peripheral country on the edge of Europe, so we have a difficult job to do in selling the country. The economic downturn is a challenge for everybody. We depend heavily on tourism as a major part of the economy in Dublin city and in my constituency. We have hundreds of hotels and restaurants which depend solely on the tourists they attract into the city.

While we have had to make very difficult decisions on how we deal with the economy, it is a challenge for all sectors of society and not just the tourism industry. We have to try to be fair with any decisions that we make. The introduction of this tax by the Department of Finance is an effort to make sure that a fair share is taken by all sides. The question is whether the €10 travel tax influences people when they make a decision to come to Ireland. I have not heard that question answered. I do not know whether there are statistics to prove that the €125 million to be brought in by this tax is counterbalanced by a loss of those people who decided not to come.

There are such statistics.

If the Deputy can produce the figures, that is fine.

They have been published.

When we are in a position to do away with this tax, it will be done.

The domestic market in Ireland now accounts for 65% of business in the intensely competitive hotel sector. That is a very significant proportion of hotel business. The State agencies have done a great job in trying to promote the domestic market, and there is a great future for that. Deputy Kitt mentioned the national conference centre, which is in my constituency on Spencer Dock. That is due to open on time in September 2010 and it will provide a great boost to business and conference tourism in future years. I do not know whether a €10 charge will make a major difference to people attending conferences at the centre. While the global economic conditions remain challenging, the level of bookings and inquiries about the centre are very encouraging. It has recently announced that it has confirmed 29 international events, with over 236,000 delegate days secured. That is a major boost to any economy. I do not think those delegates would not come here because of the tax.

In 2009, some 6.927 million overseas visitors came to the Republic of Ireland. It was a decrease on previous years, but there were record increases for the previous five or six years and we could not sustain that anyway. We must ensure that we can provide the services for the millions of people who visit this country, and that there is a standard of service that competes with the rest of the world. We have put major resources into maintaining that standard. We put major resources into training and education for our young people in management and accounting services. Some 3.25 million of those people came from Great Britain, while 2.38 million came from mainland Europe. Meanwhile, 0.98 million came from North America and 0.31 million came from other areas. We know where our market is and that was taken into account with the introduction of this tax, where there was a €2 charge, as opposed to a €10 charge, for our main market in Britain. The introduction of that tax will not deter those people from coming to Ireland. There is a huge opportunity for us to continue to sell Ireland as a destination and we have managed to do so. The air travel tax will raise €125 million in a full year. The question is whether the tax has an influence on people travelling here. That aspect should be examined.

If the opportunity arises and things improve, we could look at reversing the tax. In the current economic climate, however, all sectors of society must contribute. The incoming Minister for Tourism, Culture and Sport, Deputy Mary Hanafin, has a long association with travel matters. She will bring a new vision to the Department and I am sure that in future every effort will be made to ensure that Ireland competes internationally on a favourable basis with other destinations.

I am glad of the opportunity to participate in this discussion, which is relevant and topical given the current economic climate. The effect of the air travel tax has been overstated by the Opposition parties. We all have a view on it and are all lobbied by particular interest groups, but nobody has contacted me to make a complaint about the tax, or said it was a barrier to travel to or from Ireland.

The airlines pay it, not the passengers. Have the airlines ever contacted the Deputy?

I have never received a single representation from anybody to say that this is a barrier to movement in or out of the country.

They go to Deputy John Cregan.

From that viewpoint it is very much overstated. Are our airports supposed to run on fresh air? Have Opposition Members taken a critical look at the financial situation of our airports?

The airports are not getting the tax.

Have they spoken to the DAA, Shannon Airport or Cork Airport authorities?

The airports did not get any money.

That is fine, but the revenue is coming in to the central Exchequer so it is important from that point of view. We must raise revenue. We recently had a debate about hangar 6 when both Labour and Fine Gael adopted positions on it. I did not hear Opposition Members then calling on either Aer Lingus or Ryanair to reduce their charges or fees for passengers. Let us have some equity in this debate. I note that the motion refers to "the significant burden of local authority rates".

We hear it coming.

It is fair to ask, however, if the Opposition parties have asked their own councillors — who are in charge of most local authorities around the country — to reduce local authority charges.

That is the new spin.

They are in control of the majority of local authorities, yet they have not done anything to address commercial rates, waste water charges and water charges.

The Deputy should speak to the Minister for the Environment, Heritage and Local Government, Deputy John Gormley.

They want the power but they do not want the responsibility. I have listened to organisations, such as ISME and the Irish Hotels' Federation, which cite local authority rates as being a huge burden.

The Deputy does not listen to vested interests.

I point them back in the direction of the Opposition parties which control the local authorities. We must discuss the joint labour committees, and the social partnership structures need to be fundamentally changed. It is not good enough to have ISME and the Irish Hotels' Federation outside the door, while IBEC has a veto because it is inside and involved in the parallel process. Small and medium enterprises are employing many people, yet it is significant that they are not included in the face-to-face discussions. I would like to see them there.

Zombie hotels were referred to, but we also have zombie golf courses and leisure centres, which have sprung up in recent years. The market will regulate whether they remain in business. The motion also refers to "the Government-generated shortage in the supply of cars for the rental market". I did not know that the Government was in the business of supplying cars for the rental market.

It is in the business of taxing them.

There we go again, but we have to raise taxes to run the country. That is the reality because the country does not run on fresh air.

The Deputy would love it if it did.

I congratulate Deputy Mary Hanafin on her appointment to the important brief of tourism, culture and sport. There is a big tourism market and great potential to be tapped into. I know that she will apply her skills to that. Based on her track record in the education and social welfare portfolios, we can look forward to that potential being realised.

Many people are experiencing difficulties in obtaining passports at the moment. In addition, the travel plans of many Irish people abroad are being inhibited because of the current difficulties. We need a speedy resolution to the problem, so I call on the trade union leadership to come back in line and give this service to the people. Public service is about providing services to people, not the other way around. In this day and age, it is not acceptable to deny people their constitutional right to avail of a passport.

The Irish holiday experience has been promoted far and wide. We provide a high quality holiday experience. In my own constituency in County Limerick we have some excellent hotels, bed and breakfast establishments and guest houses which provide a high quality product to visitors. We must take every opportunity to promote them.

I wish to share my time with Deputies Burke, Joe Carey, Creighton, Tom Hayes, Reilly and D'Arcy.

Is that agreed? Agreed.

I am glad to contribute to this important debate and I commend my colleague, Deputy Olivia Mitchell, for bringing forward the motion at this time. I also wish to congratulate Deputy Mary Hanafin on her new appointment as Minister for Tourism, Culture and Sport. She has shown herself to be an independent thinker in the past and I hope she will address herself to the issues we are debating tonight. It would be a great start for her to do so. I offer her my congratulations.

The introduction of tax measures, pay cuts and income levies over the last 18 months means that nearly half a million people are out of work. Despite protestations from the Government that the worst is over and that we have turned the comer, the evidence on the ground is the opposite. Continued calls and appeals for a stimulus package to go alongside the cutbacks have fallen on deaf ears. We are told that the only show in town is to save the banks, sort out the financial mess and jobs will follow. Not only is there no stimulus package but one service industry, namely tourism, that could provide at least a partial solution is further penalised with the travel tax. It would be great to have a stimulus package but instead of solutions we got further problems. Instead of hope we have more despair and instead of increasing the number of tourists arriving on our shores, we have had the opposite. Almost 1 million fewer tourists came here last year, which is back to 2005 levels.

Nobody is suggesting that the travel tax is responsible for all of the fall-off but it is a major contributory factor. The evidence is there that once airlines drop their prices, as Aer Lingus and Ryanair have done, there is an immediate surge in passenger numbers. There would be a similar bounce if the travel tax was removed. At this stage, it is not just the vested interests, such as the airlines and tourism bodies, that are outlining the damaging effects of the departure tax; independent analysts are now giving evidence of its effect. The example of other countries that have scrapped their tourist taxes, such as Spain, Greece, Belgium and the Netherlands, should now be followed in this country.

My own county of Mayo and the north west region, which has wonderful tourism potential, is a case in point. Ireland West Airport Knock has, against all the odds, helped to stimulate tourism in the past 25 years. Passenger numbers at the airport have increased year by year and the last thing that is needed is another obstacle to its success. Whether they are visiting for the scenery, activity holidays, fishing, walking or pilgrimages to Knock or Croagh Patrick, the economic value of every passenger who comes through the airport and stays for even two or three days means that tourism jobs in hotels, bed and breakfasts and adventure centres are either created or protected. Why should we pick visitors' pockets when they are departing our country after spending their money among our people? Passengers departing from Ireland West Airport paid €2.5 million in travel tax in 2009. Interestingly, until the introduction of the travel tax at the end of 2008, the airport was the fastest growing airport in Ireland, with a 154% increase in passenger numbers. Even in 2009, numbers were maintained at 2008 levels, while other airports experienced a 20% drop.

The €2.5 million from the travel tax, if it were removed, would allow the airport to develop its great potential. Ireland West Airport Knock is by far the largest airport in the BMW region, accounting for 83% of all overseas passengers flying directly into the region from 25 international destinations. Independent analysis by Goodbody Economic Consultants has established that passengers going through the airport make a contribution of €62 million to the economy in tourism spending, and tax and PRSI from the airport are worth €8.7 million. It must be pointed out that on top of the imposition of the travel tax, Knock Airport must pay 100% of its air traffic control charges, which is not the case in State airports.

What is needed is stimulus rather than extra taxes, encouragement rather than obstacles. I commend the motion to the House.

I thank Deputy O'Mahony for sharing his time and support the motion tabled by our colleague Deputy Mitchell. I wish the Minister luck in her new portfolio, which has been rebranded. I hope she, unlike her predecessors in that portfolio, will take a hands-on approach to tourism. Tourism is in decline, not necessarily in the urban areas or the major cities, but throughout the country in rural areas. There are many reasons for this — we could lay blame all over the place — but there is no doubt the high costs endured by visitors have turned away many people.

There is one thing in particular the Minister must achieve. All agencies involved in tourism — Fáilte Ireland, the OPW, the local authorities and so on — must be drawn together to produce a co-ordinated package, which has been needed for a long time. Many people contributing to this debate have mentioned the OPW, which has done tremendous work in terms of physical building, conservation and so on. However, last week on St. Patrick's Day, the first day of the tourism season in Ireland, what happened? The OPW closed the doors of museums, castles and other facilities around the country. Tourists who had come from every part of the world found that when the parades were over the doors were closed on most of the opportunities for us to show off our culture and heritage, which most of them had come to see. It is important that in two weeks' time, when another tranche of visitors arrives for Easter week, the Minister insists that all these facilities be available to the public, particularly those who have come from abroad to see them.

I mentioned the need for a hands-on approach. I reminded the Minister's predecessor of the wonderful hub of tourist activity in Portumna, County Galway, that was centred on Emerald Star Line, which provides boats on the Shannon and Lough Derg. The company decided to take 60% of its operation from Portumna and bring it to France, which must have set alarm bells ringing in tourism circles about what could happen in our country. I highlighted this to the former Minister, who chose to ignore it and said it was a commercial decision of the company to move elsewhere. Surely, hidden within that statement, there was an acknowledgement that we were losing the battle and that he, as Minister with responsibility for tourism, was doing nothing to turn it around.

We must consider what a community can do for tourism when it gets involved. That is why I am asking that the Minister activate the community. For example, Galway won, against international competition, the chance to host once more the finish of the Volvo Ocean Race, through the initiative of a community-based organisation led by two fantastic entrepreneurs who decided they could compete with the best, not only in Europe, but also in the world, to bring the race back to Galway. This will bring 200,000 bed nights and €60 million to a small city, and its effects will also reverberate around the county. That could be replicated in many areas around the country to allow the industry to grow once more, if only there was an initiative by the Government. To be fair, the Government did support Galway's endeavour through grant aid.

I too wish the Minister well in her new portfolio, which is an important one.

The economies of Ireland and the mid-west are suffering to a far greater extent than those of other countries and regions in the global village in which we live. This is due in no small part to the introduction of the travel tax, which came into operation as a result of the fundamentally flawed and rushed budget of October 2008. That budget was presented in a panic by a new Minister for Finance who had not yet found his feet and many of its measures have since been rescinded. The short-sighted imposition of this tax has resulted in a nosedive in the fortunes of Ireland's tourism sector. Across my own constituency of Clare, businesses have closed down and jobs have been lost in hotels, pubs, bed and breakfasts, shops and restaurants.

Ryanair accounted for nearly 50% of passenger traffic through Shannon Airport in 2007 and nearly 60% in 2008. The low-fares airline transformed Shannon Airport into a major European hub, delivering 1.9 million passengers yearly. The travel tax and airport charges have been cited by Ryanair as its reasons for withdrawing 75% of its business from Shannon. Deputy Timmy Dooley, in his contribution to this debate yesterday, was virtually laughing at Ryanair's new proposal to deliver 1.2 million passengers if amended terms can be agreed with the airport authority and the travel tax is abolished. Deputy Dooley's position on this is outrageous. The bottom line is that the region needs this vital traffic.

Time and again, Fianna Fáil has let down Shannon Airport. County Clare simply cannot afford to give the two fingers to any carrier, especially one that has a proven track record of delivering large numbers of passengers. This week the DAA tried to stop the haemorrhaging of passengers from Shannon Airport by advancing a proposal to abolish charges for airlines by charging passengers directly. It is incredible that one Government agency is trying to find ways to save money for airlines while the Department of Finance is refusing to remove a needless tax.

Groups advising the Government, such as the Commission on Taxation and the tourism renewal group, have condemned the tax and Fáilte Ireland, IBEC and the National Competitiveness Council want it abolished. Ryanair boss Michael O'Leary, Aer Lingus CEO Christoph Mueller and CityJet CEO Geoffrey White are all in agreement that this tax must go. Countries like the Netherlands, Spain, Denmark and Greece have either reduced airport taxes or abolished travel taxes. Why can we not do the same in this country?

Yesterday we saw the appointment of Deputy Tony Killeen to the Cabinet and I congratulate him and wish him well. He should use his new powers to advance the interests of the county he was elected to represent. This tax has, in effect, driven the vast majority of Ryanair business from Shannon Airport. That in turn has led to a loss in business, connectivity to Shannon and jobs, which has resulted in a spiral of economic decline. This decline could be halted if those elected in the mid-west region from Clare, Limerick and north Tipperary stand for their region tonight and vote for this Fine Gael motion to abolish this disastrous tax.

Deputy Lucinda Creighton has four minutes and we are on a very tight schedule.

That is perfectly acceptable. I congratulate the Minister, Deputy Hanafin, on her new portfolio and wish her the best of luck with it. We are in challenging times in every sector of the economy and there is much potential to grow in the tourism area. The Minister will bring her skills to bear on that Department and I hope she will take on board some of the points made by us on the Opposition benches tonight. I thank Deputy Olivia Mitchell for bringing forward this very sensible motion.

My colleagues have spoken about the well-documented and substantial decline in revenues generated by the tourism industry in Ireland over the past 18 months or so. It is unfortunate and very damaging to the overall economic position in the country. We know that all aspects of the tourism industry, through the arts and cultural, heritage or hospitality elements, as well as ancillary activities and businesses, are under significant pressure. It is essential for us to acknowledge this and respond to it.

Air travel is a very important element of the issue. When it comes to innovating in air travel, Ireland has become a world leader, due in no small part to the significant success of Ryanair and the drive and innovation of Michael O'Leary. He often gets much flak and undue criticism but I hold him up as an inspiration and somebody we could learn much from in terms of how we run our economy. He has done immense and often unrecognised things with Ryanair, innovating not just in the airline sector in this country but setting an example of an economic model that has been followed in all corners of the world by other airlines.

It amazes me that when we have such a successful company in this country, the Government appears to be prepared to scapegoat the airline industry. It is important to point out that the various companies involved in air travel do not have their hands out for subsidies and are not looking to be propped up in any shape or form. They are seeking fair and fertile conditions in which to grow, which is not too much to ask for.

The departure tax penalises an industry that is innovative and which is a world leader; I cannot understand the logic. We need to encourage more growth in the industry and as an island State we particularly need to encourage air travel to and from this country. The departure tax does precisely the opposite so I urge the Minister to consider reversing it.

I will go on a slight tangent before concluding. The Government must adopt measures to support tourism. The services industry has been completely let down by this Government and the one element our party called for as a priority in our pre-budget submission was a reduction in the lower rate of VAT to 10.5%. This would make an enormous difference to restaurants, hotels and other labour-intensive industries. I hope the Minister will think about it because it is essential for employment in this country.

I commend Deputy Olivia Mitchell on putting this motion before the House. It is topical and timely as we now have a new Minister responsible for tourism. I congratulate the Minister, Deputy Hanafin, and as her family was involved in the hotel business many years ago, I know she has a great interest in and feel for tourism. The first step she should take is to follow in the argument of her predecessor and former Minister, Martin Cullen, for the removal of the travel tax. It would be a great start for the Minister, not just because it would be of significant benefit but because of the direction in which it would send the tourism industry.

There is much potential in the tourism industry, with some 500,000 people in this country unemployed. The Government and all agencies are considering every way to get those people back to work and in my considered opinion, there are two areas where there has traditionally been significant employment in the past but which we have not looked after in the Celtic tiger years. They are agriculture and tourism.

Tonight is about tourism and the significant potential for job creation in that area. Many issues have been discussed tonight which are impediments to a tourism revival in this country. For example, we spoke about the lack of rental cars, which was created by the mismanagement of this Government. It put in place a scrappage scheme which had an effect on the supply of cars so the Government and its Cabinet must deal with the problem. It is one example that must be tackled.

We need to bring people into the country and make Ireland competitive again. Hotels are dropping rates and across the country deals are being made. The Government should be about leadership and it should cut the travel tax. It would not have a significant impact on the economy but it would send the message that the Irish Government is serious about bringing people into this country.

There is much investment hanging on a thread. How many golf courses, hotels and other private businesses are under severe pressure and living from day to day? If we could get more people into the country, it would help such businesses overcome their difficulties. There would be more people employed and there would be a buoyancy in the economy. It is one of the real ways in which Ireland can restore itself.

I beg the Minister to follow Martin Cullen's wish and go back to the Cabinet to try to change the travel tax measure. It is very important for the future of our country.

I am glad to have the opportunity to speak to this motion and I compliment our spokesperson, Deputy Olivia Mitchell, on bringing it before the Dáil. As the previous speaker, Deputy Tom Hayes, has noted, tourism is a very important product in this country. I come from Westport which is one of the most beautiful towns in the country and it is very much dependent on tourism.

The tourism sector is extremely important in the context of job creation. Many people in Westport depend on tourism. In that context, we should be considering ways to attract more visitors to the country. By helping the economy to return to a position of growth, tourism is one of the industries that will assist us in emerging from the recession. However, those in the industry are going to require support. We will be obliged to consider ways in which we might attract increasing numbers of visitors.

The travel tax is outrageous. It is imposed on people leaving and entering the country. This tax is not necessary and more money is being lost than is being gained as a result of its imposition. Mr. O'Leary of Ryanair stated that he could encourage many more people to visit the country if the tax was not in place. In light of the small amount of money it brings in to the Exchequer, it is time the travel tax was abolished.

Some hotels open on a year-round basis. There are 11 hotels in Westport. These hotels cannot obtain the same price for their product in December as they can in August. As a result, they are obliged to reduce their prices. That is why the Government must re-examine the position with regard to the travel tax. It must also consider other ways in which the industry might be encouraged, assisted and supported. Those in the hotel industry want action to be taken with regard to the stealth taxes that apply in respect of their sector. The rates relating to hotels that open on a year-round basis will have to be reduced in the same way they are for hotels which close for three or four months of the year.

Tourism is an extremely important industry. I hope the Minister will lobby other members of the Cabinet, particularly the Minister for Finance, in respect of it. I wish her well in her new position. Despite what people state, hers is an important portfolio. Tourism is a vital industry which can create even further jobs. All those in it are seeking is some support and assistance from the Government in order that the jobs which already exist might be protected.

I congratulate the Minister on her new portfolio, which, as previous speakers indicated, is extremely important and which has a great deal of potential. I hope she will exploit that potential to the fullest possible extent in order to assist those in the tourism industry.

I thank Deputy Mitchell for moving this motion, particularly as tourism is a key issue at present. Those in the industry estimate that the travel tax is responsible for €480 million of the €1.2 billion decrease in tourism incomes. The tax brings in €91 million to the Exchequer. If one takes it that 20% would be the taxable income from €480 million, then that is almost €100 million. In view of the fact that 3,000 jobs have been lost at a cost of €21,000 each per annum, the figure rises to €163 million. This means that the net loss already stands at €70 million. The tax is, therefore, costing the Exchequer at least that amount. This is before one considers the effect it has on small local bed and breakfast establishments and hotels and the grocery shops and other businesses which supply them with goods and services.

The area of Fingal in which I reside and which I represent has great tourism potential, particularly as much of it is located next to the Irish Sea. In that context, the travel tax is having an extremely negative effect on families in Swords, Malahide, Balbriggan, Rush, Lusk and Skerries which are dependent on this industry. We ought to listen to those — including the tourism renewal group, Fáilte Ireland, the Commission on Taxation, the National Competitiveness Council, IBEC, the Irish Tourist Industry Confederation, Ryanair, Cityjet, Aer Lingus and the Irish Hotels Federation — who have requested that the tax be abolished. The tax does no favours to the Dublin Airport Authority, the companies which serve the airport or anyone who is employed there.

Jobs are being put at risk as a result of this tax. The only thing which compares to this crazy and hare-brained measure is the increase in VAT which the Minister for Finance introduced and then admitted was costing the country hundreds of millions of euro. However, he also failed to take action in respect of that matter. The writing is on the wall. This tax must be removed.

A body that could deal with the excess bed capacity that exists in hotels must surely be established under the aegis of the Minister's Department. This body could put in place an initiative to encourage the Irish Hotels Federation, the airlines and Fáilte Ireland to take action — including by means of offering cheap flights — in order to attract more visitors to this country and fill some of that capacity.

Deputy Mitchell stated that, in Government, Fine Gael would abolish this tax. We hope that in response to such a move, Ryanair and Aer Lingus would restore the routes they cut as a consequence of the introduction of the tax.

I congratulate the Minister, Deputy Hanafin, on her new portfolio. I consider her to be a capable member of a rather incapable Government.

One of the difficulties the Government faces is that no member of the Cabinet has ever been in business. Government Ministers know nothing about paying rates or the JLC wage structure. They do not understand the difficulties faced by businesses. I am sure it is a nice accounting trick to impose a €10 tax on everyone who flies into the country in order to raise tens of millions. There is no doubt that this is a handy way to bring in money but, as previous speakers stated, it is costing us more in the long term.

There has been some discussion with regard to the destinations to which people can fly in this country. Areas with airports are lucky because they get the first bite at the cherry in the context of attracting tourism revenues. However, difficulties arise for areas which do not contain accessible airports because the statistics show that fewer people are prepared to travel on to the regions from the point at which they enter the country. I refer to the county in which I live, Wexford, in this regard.

The Ceann Comhairle has family in Blackwater in County Wexford. He will be familiar with Courtown, to which tax designation was granted in the early 1990s. As a result of the tax breaks available from the State, thousands of houses were built in Courtown. However, we cannot encourage people to stay in these houses when they come here, particularly if the Government is intent on imposing a tax on those who travel to this country by aeroplane. The starting point with regard to dealing with this matter is the abolition of the travel tax, which is a stupid measure. In addition, the Government must offer some form of incentive for tourists to visit areas where tax breaks were offered to people to build houses. There are thousands of houses in some areas that were given tax designation but there are no tourism attractions in these places. The Government must take action to reverse the position and put in place such attractions.

On the subject of zombie hotels, I spoke to one individual who is a hotelier — he is not a developer — and whose business it is to provide people with a place to stay. There has been a great deal of discussion with regard to the provision of services in this State, particularly to those who come here to spend money while on holiday. The man to whom I refer is in competition with hotels that are operated by State-guaranteed banks. He is, therefore, in competition with the taxpayer in the context of trying to provide people with a place to stay. In such circumstances, there is no way he can win.

When the banks get their money from NAMA and do whatever it is they intend to do with the hotels they own, the man to whom I refer and others like him will still be trading. These are the people the Minister will be meeting during the next two years or so. It is they who she will need to assist her in driving the industry forward. It would be reckless of her if she failed to ensure that those to whom I refer will not be subjected to unfair competition.

I had understood that the Minister for Finance was due to make the final Government contribution to this debate. However, I am delighted to take the opportunity to contribute. Perhaps I might share the time available with the Minister for Finance who I am sure will arrive shortly.

That is agreed.

I thank the Deputies opposite for offering me their good wishes on my appointment. I am glad that Private Members' time has been given over to a debate on a subject as important as tourism. This debate belies comment in the media to the effect that tourism, culture and sport are not important to this country's people or its economy. Tourism is important as regards its potential to give rise to employment and investment and must be viewed in the context of the domestic and international markets. There is a resolve among people throughout all of the sectors to market the best of what is Ireland. Certainly, over the coming years I aim to prove that, as one of our indigenous industries, tourism, which already employs 200,000 people, is one area which we can expand and which will promote Ireland. I look forward to doing that and to working with the Opposition spokespersons on something which is genuinely in the best interests of the Irish people.

I am pleased to take this opportunity to address the House on the subject of the air travel tax and the wide range of issues raised in the motion. I understand that last night my colleague, the Minister of State, Deputy Seán Haughey, did not have the opportunity to address some of the issues raised in the motion and I hope to address these outstanding points.

Deputies are aware of the general economic position and the responsibility of the Government to bridge the gap between expenditure and income. The air travel tax is but one of the measures adopted for this purpose and so far it has raised €99 million and will raise €125 million in a full year. Any party coming into the House arguing for the abolition of a tax has a responsibility to specify an alternative way of raising that revenue. Is Fine Gael suggesting we raise it by increasing income tax, VAT or excise duty? It has been recognised by all commentators that our revenue base has been very weak in recent years. There is an onus on anyone advocating its further depletion to identify where that revenue base can be shored up. Our options are limited and given the significant drop in the tax take, we have to find ways to raise moneys which we need to pay in part for vital public services. It is not an option for Government to succumb to every eye-catching interest group that walks past these buildings. That may be a luxury in which Opposition Deputies can indulge from time to time — not always, I accept — but we cannot.

In shoring up the gap between what we as a State take in and what we spend, the Government has to take an overall view that ensures the burden is spread fairly across all sectors. I would be the first to acknowledge that low cost travel has been good for Ireland. The pioneers in this area deserve to be commended. Mr. O'Leary has spoken very eloquently on the subject of this tax and I have listened very carefully to what he has had to say about it. However, it is simply not credible to argue that the new tax is to blame for the fall in passenger numbers.

We need to bring a sense of balance to this aspect of the debate.

It would hardly increase them.

In the past few years, we saw exceptional growth in air travel both to and from Ireland. Irish residents in many cases made several trips abroad in a calendar year. The downturn in the economy and increased economic uncertainty has seen a change in behaviour in this regard. Consumers are not taking as many foreign trips as they did at the height of the boom. All Members of the House know that and it is a pretence to state it is caused by the air travel tax. That is the reason for the fall in passenger numbers. To suggest that people are not travelling because of a tax of €10 is tendentious. An air trip abroad generally involves expenditure of several hundred euro. Singling out the €10 tax charge as the major disincentive for the intending traveller is stretching credibility. How can it be argued that the tax is more of a disincentive, for example, than the non-discretionary on-line check-in fee of €5 per flight or €10 per return flight? That is to single out just one of the myriad charges imposed by the airlines.

The introduction of a modest air travel tax is an important revenue raising measure in the context of the financial challenges we now face. The Government regards this tax as a fair tax in the current circumstances and I have no immediate plans to abolish it. It will raise approximately €125 million in a full year in circumstances where those additional revenues are required to fund badly needed services.

Every sector can argue against taxation. Last night, my colleagues on this side of the House referred to the fact that having a debate on tourism which focuses on the €10 tax really misses the point. Ultimately, airlines respond to consumer demand. They will fly where people want to go. Everyone in the tourism sector, supported by Government, must ensure that our tourism experience is of a top standard and that the industry is flexible to meet the changing demands of holidaymakers. My colleague, the Minister of State, Deputy Haughey, last night outlined the significant Government investment in tourism. My colleague, the Minister for Tourism, Culture and Sport, Deputy Mary Hanafin, will make the extension of numbers and of the tourism industry a key priority in her Department in the years ahead. The sector faces challenges but we are committed to supporting this valuable industry with the resources available to us.

Deputy Upton made the point that we need to focus on emerging markets, particularly Asia, for growth in tourism numbers. However, she noted that the visa application process in some Asian countries can be slow and therefore hampers any such growth. That issue falls within the remit of the Department of Justice and Law Reform and I understand that it has stated it is open at all times to suggestions on how the visa service rules and requirements can be improved to meet the needs of all sectors affected by visa issues, including the tourism sector.

I thank my colleague, Deputy Olivia Mitchell, for tabling the motion. It is timely in terms of the Cabinet reshuffle and I congratulate the Minister. I listened to her on the radio this morning and she was right to talk up the Department. The tourism product is something on which we can hang our hat in moving the economy forward.

The Minister should seriously examine the cultural landscape of rail tourism and the landscape possibilities and permutations we have for it. I have been beating the drum on this for a while. The Minister should sit down with the new Minister of State with responsibility for sustainable transportation, Deputy Ciarán Cuffe, because he has already planned to try to push the western rail corridor. In fairness to the Minister for Transport, Deputy Noel Dempsey, he has been an advocate of rail along the western corridor and there is a drive towards putting rail tourism on the map in the west. The Minister should follow the commitment we bought into constitutionally in the 1998 referendum on the Good Friday Agreement and look at the possibility of interlinkages in the transport sector. The British Irish Parliamentary Assembly has backed a motion for rail connectivity on an all-island basis. That has passed at British, Irish and Northern Irish level and what it needs now is proactivity at governmental level in this country.

A Chinese citizen who decides to visit Belfast must obtain a holiday visa and that is fair enough. However, if that Chinese tourist decides to take a trip from there to Donegal or Dublin, he or she must obtain a second visa. The all-island agenda provides an opportunity to consider a single visa and a single point of entry for foreign tourists. The former Minister was not aware of this anomaly when I raised it previously. The Minister should seriously consider it because it creates bureaucracy and inaccessibility for people from outside the European Union who want to visit this country.

I am willing to work with the Minister as an Opposition spokesperson with a keen interest in tourism from a county, Donegal, that has always been furthest from the minds of those in the tourism industry. We have opportunities. Last year, 400,000 tourists visited the Giant's Causeway in Antrim. It is not our job to try to displace the tourist attraction at the Giant's Causeway; we would not succeed. However, we have an opportunity to help those tourists continue their journey. Why not consider a joined-up single all-island marketing strategy that will enable 400,000 people not necessarily to cross the Border into Donegal, but to continue their journey? The Minister has the skills for this joined up thinking. She has proved herself at other Departments and I look to her to show some initiative in the three areas I raised.

I thank my colleague, Deputy Mitchell, for bringing this issue to the fore. I wish the Minister well in her new portfolio. I am somewhat disappointed with the Minister for Finance tonight. I assume that he has to back the budget measures but with regard to the rationale behind what he stated, I fully appreciate the €10 travel tax is not the reason the entire thing has fallen to 2004 levels. Nobody is suggesting that. Our essential point is that from a tourism perspective, right across the world all indications are that people like to come to Ireland because we are a friendly nation, which hopefully will continue. This always is the top reason in all surveys and is of great importance. Anything that takes away from this is bad for Ireland. It should be noted that governments and nations throughout the world are doing their level best to do what we also are trying to do here, which is to get more people to visit their respective tourist spots. In the last budget, the Government added another trap that would make it a little more difficult for those who sell our product globally to come to Ireland. That is all that happened. In bad or difficult times, such loading, even if it only amounts to €1, sends out the wrong signal. Hopefully, we will return to a position whereby far more people will visit Ireland than there are natives living here. Both Fine Gael and the new Minister want to see the country teeming with visitors. I would like to spend half an hour discussing the point that regardless of how one attracts such visitors in, the subsequent distribution constitutes another major story on which Members do not have the time to dwell this evening. However, the travel tax simply sends out the wrong signal at the wrong time, which is the reason so many people were sickened by what happened.

I refer to an issue on which Deputy Mitchell has argued strongly. It is to be hoped that this tax will be removed shortly and I expect that on foot of its abolition, when and if that happens, the strategic routes axed by both Aer Lingus and Ryanair will be restored because they are vital to the tourism industry. I will conclude by asking the Ministers of Tourism, Culture and Sport and Finance to take seriously the issue of zombie hotels. As far as I can ascertain, the banks and their supporters are putting family-run hotels out of business. Should this happen, it would be nothing short of a disaster. While I do not know how this might be achieved, I ask the Ministers opposite not to allow the banks to add insult to injury by keeping the aforementioned hotels open for their own purposes.

I also wish the new Minister for Tourism, Culture and Sport good luck in her new Department. I was pleased to hear her recognise the importance to the economy of tourism and that this is what she intends to promote because that will be absolutely necessary. Last night, my colleagues and I spoke at great length about the various obstacles lying in the path of this industry with specific reference from a political perspective to those which are imposed by the Government. Members also discussed the so-called zombie hotels, namely, the tax incentivised hotels and their destructive impact on existing hotels and bed and breakfast establishments nationwide. Insolvent hotels are being subvented by banks which the public in turn are subventing and the Government must have a role in ensuring that such insolvent hotels are allowed to fail because otherwise, good businesses will fail. This is the way the market works. It is painful but it must happen and the sooner it happens the better for everyone as there then can be a return to normal trading conditions and competition practices.

Members also discussed the availability of cars for hire, which also was discussed on Committee Stage of the Finance Bill. While the Minister for Finance stated it would have cost €7 million to include the car hire industry in the scrappage scheme, the cost to the country of not including it is €260 million. A triple whammy is befalling this particular industry that will have a huge impact nationwide. Moreover, this will not be limited to the car hire industry but also will affect hotels and the bed and breakfast sector in particular, which is 80% dependent on people who hire cars. While the impact will be nationwide, it will affect the regions in particular. Moreover, this issue will cause both problems this year and reputational damage subsequently because turning people away for the lack of cars to give them sends out the signal that Ireland simply is not geared up for the tourism industry. In addition, those cars that are available are outrageously priced when compared with all our competitors. Consequently, something must be done in this regard and the Minister will ignore this problem at her peril, regardless of what the Minister for Finance sitting beside her might tell her.

My colleagues also discussed the cost and complexity of getting a visa to visit Ireland. While the cost involved is one aspect of this issue, the complexity and nature of the questions and conditions required of people who try to apply for a visa are such that they would make one lose the will to live, much less to travel to a country that would dream up such conditions to impose on its visitors. Members also spoke about the Office of Public Works, OPW, and its failure to perceive itself as being part of the national economic recovery drive or in having a role in welcoming and facilitating visitors. Perhaps this is more of a failure on the part of the Department of Finance, which is the OPW's parent Department. It is ironic that although Tourism Ireland managed to persuade historic sites in other countries, including locations in Sydney, Australia, Great Britain and the Statue of Liberty in the United States to celebrate St. Patrick's Day by encouraging visitors to come here, for our own part we do not make our historic sites as welcoming as we ask those in other countries to be. The problem pertains to attitude and I believe a case exists to make those sites much more commercially orientated by giving them out to the private sector. While I accept the Office of Public Works does a great job in preservation, conservation and upkeep, I believe such sites should be given out to tender. I believe this would lead to an operation that would be more commercial and which would see itself as having a role in attracting visitors.

Members also spoke about costs in the industry. While I do not have time to discuss them in detail, they spoke primarily about the subject of this motion, the travel tax, because no matter how right we get everything else, it all will be for nothing if people cannot get here easily and cheaply. The Minister for Finance should note that I was aghast at the complete lack of comprehension displayed by speakers last night and this evening about how this tax affects tourism. As a direct result of Government action regarding this tax, aeroplanes now fly into Ireland from at least 24 fewer locations than was the case 18 months ago. Such destinations simply no longer are on the radar for Irish tourism. They no longer are interested in Ireland and consequently, there is no point in going there to engage in marketing. For example, when it was about to launch its marketing programme in Germany this year, Tourism Ireland discovered that eight of its target cities had lost their direct flights to Ireland. I was even more amazed at the lack of insight that informed the Government's counter motion, which "considers that the impact of the air travel tax on tourism has been considerably overstated in the context of overall purchasing decisions by visitors". However, this has nothing to do with the purchasing decisions of visitors. An Italian or German who tries to book to come here is not even aware of the travel tax. The travel tax is not paid by visitors and the entire point is that it is paid by airlines that have decided to take their aeroplanes elsewhere to do their business. That is the impact of travel tax. I note that Deputy Kennedy tried to point out to me that €10 would not make any difference and the Minister also made the same point. Deputy Kennedy represents Dublin North, which is where Dublin Airport is located, and I note that Aer Lingus will point out just how price-sensitive are air tickets. Were this simply a tax on visitors, it would make a difference but the point is that it is not a tax on visitors but is paid by the airlines.

Various speakers also mentioned that this travel tax applies in other countries. However, we are the only island that imposes this tax. Moreover, I might add that Ireland is the only country to impose this tax in the middle of a recession just as tourism figures were collapsing. We must do better more cheaply and to have better air connections than anyone else if, as an island country, we have aspirations also to be a tourism destination. It might have been true 18 months ago — I read the same Department of Finance speech on the International Air Transport Association, IATA, several months ago — but it is wrong now. Aviation services in almost every European country are increasing this year, the overall figure being almost 5%. In some countries, the figure is much higher. In Ireland, the figure has fallen by 13%. It is small consolation — we are looking for consolation now — that we are only slightly worse than Ukraine, which says it all. Ryanair and Aer Lingus carried more passengers last year than they did previously. They are growing passenger numbers. This is not an international phenomenon. Rather, it is unique to Ireland. We are losing passengers while others are not, so it must be something we are doing.

Given the types of advice and understanding offered yesterday and tonight regarding aviation and tourism, we are a country in big trouble. It is depressing to hear a word-for-word replica of a speech we heard months ago. If the Minister doubts what I say or what the airlines are telling us, he should listen to his advisers, namely, the tourism renewal group, the Commission on Taxation, IBEC, the Irish Tourist Industry Confederation, Fáilte Ireland and even the National Competitiveness Council, which have all stated that this tax is damaging Ireland. Will the Minister please listen to his advisers and get rid of this tax?

Amendment put.
The Dáil divided: Tá, 77; Níl, 66.

  • Ahern, Bertie.
  • Ahern, Dermot.
  • Ahern, Michael.
  • Ahern, Noel.
  • Andrews, Barry.
  • Andrews, Chris.
  • Aylward, Bobby.
  • Behan, Joe.
  • Blaney, Niall.
  • Brady, Áine.
  • Brady, Cyprian.
  • Brady, Johnny.
  • Browne, John.
  • Byrne, Thomas.
  • Calleary, Dara.
  • Carey, Pat.
  • Collins, Niall.
  • Conlon, Margaret.
  • Connick, Seán.
  • Coughlan, Mary.
  • Cregan, John.
  • Cuffe, Ciarán.
  • Curran, John.
  • Dempsey, Noel.
  • Devins, Jimmy.
  • Dooley, Timmy.
  • Fahey, Frank.
  • Finneran, Michael.
  • Fitzpatrick, Michael.
  • Fleming, Seán.
  • Flynn, Beverley.
  • Gogarty, Paul.
  • Gormley, John.
  • Grealish, Noel.
  • Hanafin, Mary.
  • Harney, Mary.
  • Haughey, Seán.
  • Healy-Rae, Jackie.
  • Hoctor, Máire.
  • Kelleher, Billy.
  • Kelly, Peter.
  • Kenneally, Brendan.
  • Kennedy, Michael.
  • Killeen, Tony.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lenihan, Brian.
  • Lenihan, Conor.
  • Lowry, Michael.
  • McDaid, James.
  • McEllistrim, Thomas.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McGuinness, John.
  • Moynihan, Michael.
  • Mulcahy, Michael.
  • Nolan, M. J.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • O’Brien, Darragh.
  • O’Dea, Willie.
  • O’Donoghue, John.
  • O’Flynn, Noel.
  • O’Keeffe, Batt.
  • O’Keeffe, Edward.
  • O’Rourke, Mary.
  • O’Sullivan, Christy.
  • O’Sullivan, Maureen.
  • Power, Seán.
  • Roche, Dick.
  • Sargent, Trevor.
  • Scanlon, Eamon.
  • Smith, Brendan.
  • Treacy, Noel.
  • Wallace, Mary.
  • White, Mary Alexandra.
  • Woods, Michael.

Níl

  • Allen, Bernard.
  • Barrett, Seán.
  • Broughan, Thomas P.
  • Burke, Ulick.
  • Burton, Joan.
  • Carey, Joe.
  • Clune, Deirdre.
  • Connaughton, Paul.
  • Costello, Joe.
  • Coveney, Simon.
  • Creed, Michael.
  • Creighton, Lucinda.
  • D’Arcy, Michael.
  • Deasy, John.
  • Deenihan, Jimmy.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Enright, Olwyn.
  • Feighan, Frank.
  • Ferris, Martin.
  • Flanagan, Charles.
  • Flanagan, Terence.
  • Gilmore, Eamon.
  • Hayes, Brian.
  • Hayes, Tom.
  • Hogan, Phil.
  • Kehoe, Paul.
  • Kenny, Enda.
  • Lynch, Ciarán.
  • Lynch, Kathleen.
  • McCormack, Pádraic.
  • McEntee, Shane.
  • McGinley, Dinny.
  • McGrath, Finian.
  • McHugh, Joe.
  • McManus, Liz.
  • Mitchell, Olivia.
  • Naughten, Denis.
  • Neville, Dan.
  • Noonan, Michael.
  • Ó Caoláin, Caoimhghín.
  • Ó Snodaigh, Aengus.
  • O’Donnell, Kieran.
  • O’Dowd, Fergus.
  • O’Mahony, John.
  • O’Shea, Brian.
  • O’Sullivan, Jan.
  • Penrose, Willie.
  • Perry, John.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Reilly, James.
  • Ring, Michael.
  • Shatter, Alan.
  • Sheahan, Tom.
  • Sheehan, P. J.
  • Sherlock, Seán.
  • Shortall, Róisín.
  • Stagg, Emmet.
  • Stanton, David.
  • Timmins, Billy.
  • Tuffy, Joanna.
  • Upton, Mary.
  • Varadkar, Leo.
  • Wall, Jack.
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Paul Kehoe and Emmet Stagg.
Amendment declared carried.
Motion, as amended, put and declared carried.
Barr
Roinn