I welcome the opportunity this afternoon to make a general statement on tourism to the Seanad. I am looking forward to contributions from Members on this subject as I am particularly interested in getting views and advice on how this important industry may continue to develop and to make a strong contribution to wealth and employment creation in Ireland.
Tourism has been one of the great success stories of the country's recent economic revival. I have described it as one of the Celtic tiger's most vigorous cubs. Let me illustrate the point with a few statistics. Overseas visitor numbers have doubled over the past ten years from 2.4 million to 5.2 million, foreign revenue earnings have almost trebled over the same period from £800 million to £2.1 billion and employment has doubled from 60,000 to 120,000. Members will agree these are impressive figures and a fitting tribute to all those dynamic women and men — in almost 15,000 establishments around the country — who together make up this diverse industry.
Many factors have contributed to this success story which has put Ireland at the very top of the international tourism performance league. Our sound economic fundamentals and improved competitiveness of recent years have been important. So, too, has the buoyancy of our main source markets in Britain, North America and Continental Europe. More regular, diversified and competitive access transport links have been pivotal.
The face of Irish tourism has been transformed also as a result of the higher priority which successive Governments have afforded to the tourism sector in overall economic policy. Central to that transformation has been the availability of substantial EU funds over two successive rounds of EU Structural Funds which has leveraged investment of £1 billion on product development, marketing and training. This has helped to upgrade the range and quality of our accommodation stock, transport infrastructure, culture and heritage attractions and added a variety of new and improved high quality tourist attractions geared to the modern discerning visitor.
When the Government was formed in June 1997 we identified our main objectives over key areas of public life for the next five years. Setting the right direction for Irish tourism was just one of these areas, although it was considered to be a very important one. The Government identified a specific range of functions and services that have a direct impact and influence on the economic and social progress of Irish society.
By creating one Department with responsibility for Tourism, Sport, Recreation and Local Development, the Taoiseach considered that a focused approach to all these inter-related issues could be adopted. Although my Department is just over one year old, in this short time I believe real progress has been made across a range of areas. However, today's debate is focused on the area of tourism and I will outline in more detail later our specific tourism achievements under the Government's action programme.
The present EU operational programme for tourism sets out the Government's targets for the tourism industry for the period 1994-9. These are to achieve foreign exchange earnings of £2.25 billion per annum by 1999; create the equivalent of up to 35,000 new jobs in the economy; concentrate a significant proportion of tourism growth in the shoulder and off-peak periods, that is, outside the months of July and August and improve the quality of service in the Irish tourism product by the provision of high quality training programmes.
I am glad to report to the House that these targets are being met and we have every confidence that by the end of the programme we will have achieved our main goals. The strategy to achieve these targets focuses on a large expansion in marketing activities, which are vitally important further product development to meet specific market deficiencies major improvements in the conference, angling and cultural tourism product and an expansion in the range and scale of training to cater for the anticipated employment growth. This particular area has been a major problem in the recent past.
Overall, the programme envisages total investment of £650 million during its lifetime. Some £370 million of this will come from the EU, with the public and private sectors contributing £75 million and £200 million, respectively. There are various programmes in this area which are under the aegis of other Departments.
Official figures from the Central Statistics Office for the first six months of this year show the number of overseas visitors grew by 10.7 per cent on the same period in 1997, from almost 2.2 million to over 2.4 million. Such an increase augurs well for the season as a whole and is a credit to the joint efforts of both Bord Fáilte and the industry who are out there selling Ireland in an increasingly competitive market.
Bord Fáilte has forecast a growth target of 8 per cent in visitor numbers and 9 per cent in revenue for the full year, and I am confident both targets will be achieved. These figures are a credit to the men and women of Bord Fáilte when one considers the average growth in any other European country is just 3 per cent and that this country has increased growth by 8, 9 and 10 per cent over those years.
Bord Fáilte has provided me with details of our performance in the various markets for the year to July. Britain continues to be the strongest performing market, up 15 per cent on last year. The North American market shows moderate growth of 4 per cent for the same period. Mainland European visitor volumes, reflecting strong business travel growth, are up 6 per cent for the year to date, following the downturn experienced last year. The French market continues to perform relatively well, but the German market remains weak.
In this regard, I recently asked the chairman and the new chief executive of Bord Fáilte to reassess our tourism marketing positioning in Germany. I believe we are not tapping the maximum potential the prospects from that country, which is the most important outbound tourist market in the world. Various aspects continue to blame the German economy for this situation. However, statistics show that 60 million Germans, out of a population of between 80 million and 85 million, take at least one holiday a year. Those figures indicate we cannot blame the German economy for everything.
Continuous surveying being carried out within the tourism industry across all sectors and regions suggests strong tourism performance throughout the July to August period. However, I am particularly conscious that soundings and anecdotal evidence point to mixed sectoral results in certain areas for this year. For instance, I understand that some of the non-hotel accommodation sector — bed and breakfast and self-catering — are experiencing a softer market and that business may be flat in certain geographic areas.
There is no doubt that this year's bad summer weather affected business, particularly in the domestic market which would have a particular impact in western seaboard locations. Earlier in the season the World Cup clearly kept many British and Continental visitors from coming to Ireland. It is also likely to have kept some domestic holiday makers at home.
In considering the overall performance of tourism this year we must also take account of the fact that there has been a major expansion in accommodation stock. Let me give the House a few examples of these interesting statistics. This year the number of registered guesthouses around the country is 422; last year it was 377. The number of town and country homes, bed and breakfasts, has risen to 4,415, an increase of 358, and in the self-catering sector the addition of 833 new premises to the list brings the total this year to 6,151. Hotels, similarly, have increased in number by as many as 32 over a period of just one year, and in hotel bedroom capacity terms the first six months of the year saw an overall increase of as much as 15 per cent. What this means is that even with the healthy increase in tourist numbers, which we have been achieving, there may be pressures in certain sectors in certain parts of the country as an ever increasing number of tourists is required to fill the considerable additions to the stock of accommodation. When one takes into consideration that it is anticipated that upwards of 80 new hotels may be built by the end of 1999, it will increase hotel bedroom accommodation from approximately 32,000 hotel bedrooms to well over 37,000. That will achieve fierce competition in the market.
The available statistics on the regional distribution of tourism revenue show that growth rates have been achieved in all regions in recent years which are better than international and European averages; but there have been significant variations in performance. The reasons for this may be many and varied. For example, in the first six months of this year Dublin increased its share of visitor nights spent in the Republic with a particularly strong performance in the British market reflecting the city's current popularity as a short break destination. Similar growth levels have not been achieved in other regions, for instance, the north-west, the west and midlands. Having said that, I do not believe Dublin is taking business from the western regions as such as the issue is a lot more complex than that. However, it is important to take whatever steps I can to help ensure a balanced spread of tourism revenue across the regions.
On my initiative, the Government has allocated an additional £8.5 million for tourism marketing for 1997 and 1998. An important focus for this additional funding has been the development of tourism throughout all the regions so as to ensure that the benefits of the overall increases in tourism revenue are spread countrywide. These additional funds have allowed Bord Fáilte, on the basis of marketing programmes for 1998 submitted by the regional tourism authorities, to provide special marketing allocations to each of the regions. These funds, which are complementary to national marketing programmes, provided the impetus for the regional tourism authorities, in conjunction with the industry and the local authorities, to undertake marketing campaigns heretofore never undertaken on such a scale by the regions.
The initiative exposed the local product providers to the realities and demands of marketing overseas. It provided a forum for participation in marketing initiatives that would not have been possible within their own financial capabilities. I have asked Bord Fáilte to monitor the situation and to continue to track the regional distribution of tourism revenue flows. With competition and the accommodation base extending as it is, it is no longer feasible to expect success by putting up a bed and breakfast sign in the garden and hoping people will drop in. Competition exists for all at this time.
The upward trend in visitor numbers, foreign revenue and employment, to which I referred earlier, clearly confirms that Irish tourism has been an outstanding economic success and one of the fastest growing sectors of the economy. We must, however, avoid becoming complacent given our long track record of success and the excellent results achieved to date. As we face into the remainder of the decade, the challenge to create further economic growth and employment remains. There is an overwhelming need, therefore, to enhance our competitive position in relation to other destinations and, in so doing, ensure that we sustain the existing growth levels in performance and expand market share worldwide in the future.
The indications are that this year will be yet another record year for overseas visitor numbers and revenue. As I already mentioned, an increase of 8 per cent in visitor numbers and 9 per cent in revenue, has been forecast. Bord Fáilte's allocation for marketing and promotion under my Department's Vote, of almost £28 million for 1998, in association with the efforts of the overseas tourism marketing initiative, has enabled it to undertake an enhanced overseas and regional tourism marketing campaign, designed to help deliver the increases as forecast. I recently agreed to the appointment of a new chief executive, Mr. John Dully, to Bord Fáilte. During his time in my Department as Assistant Secretary with responsibility for tourism, Mr. Dully made an enormous contribution to the development of Irish tourism. I am glad to have the opportunity to continue working closely with him and know that Bord Fáilte will benefit greatly from the wealth of experience and knowledge he brings to his new post. With the chairman and the board of Bord Fáilte, John is in the process of revising senior management structures both at home and overseas within the board to ensure that it has the right structure and people to support the industry into the future.
The overseas tourism marketing initiative, which will receive Exchequer and EU support this year of over £5 million, continues to play a pivotal role in the tourism destination Ireland marketing effort. It has brought together the public sector tourism bodies North and South, the European Union and more than 50 commercial investors from the industry in a fruitful partnership and its carefully orchestrated advertising media campaigns in the British, US, German and French markets have resulted in significant increases in tourism flows to the island as a whole. Furthermore, the industry's hands-on involvement, through its participation on the board and subcommittees of OTMI, has provided valuable assistance and input and has fostered a spirit of productive co-operation between the public and private sectors. I am very keen to encourage this general type of all-Ireland industry co-operative marketing effort in the future.
The total Exchequer allocation to CERT — the Council for Education, Recruitment and Training — in the hospitality sector for 1998 will be £3.4 million which will be augmented by European Social Funds of £11 million, bringing its total allocation to £14.5 million for this year. The council continues to play an important role in the growth and development of the Irish tourism industry. CERT expects to train over 11,000 people for the industry in 1998. Under its three main measures, CERT organises courses for the unemployed, for young first time job seekers and for those already working in the industry.
I appointed a new CERT Council last year which includes members who have a vast amount of knowledge and experience of all sectors of the industry. Under its new chairman, Mr. Eamon McKeon, who has many years experience in the hotel sector in the Great Southern Hotel Group, the council will address the recruitment and training challenges facing the industry up to and beyond the millennium. With my agreement, CERT recently appointed a new chief executive, Mr. Shaun Quinn, and I have no doubt that his ability and vision will be an outstanding asset to both CERT and the wider tourism industry in Ireland.
The craft skills shortages which are currently affecting other buoyant industries are now unfortunately a feature of the tourist industry. CERT is addressing this problem and is embarking on the largest ever recruitment campaign for the industry. At the same time, £20 million will be invested in expanding CERT training facilities for tourism at third level colleges. The new employment opportunities created by an expanding tourism industry represent a major challenge for the sector.
In 1996 the St. Patrick's Festival Company was formed with the aim of improving the national St. Patrick's Day Parade in Dublin and by the year 2000 developing the St. Patrick's Festival into a major international event. The reaction to the 1998 festival clearly demonstrated that we are well on the way to achieving this objective. I was happy to continue to provide financial support towards the event. The festival creatively, professionally, exuberantly and good humouredly reflected the great spirit of the Irish and projected a genuine image of the country to the visitors attending and the many millions of viewers and readers worldwide exposed to coverage of it. As Members are aware, next year's St. Patrick's Festival will kick off our millennium celebrations. I hope Irish people and Ministers will be in Dublin rather than abroad to celebrate the festival then and in the future.
On my initiative, the Millennium Festival Company was formed earlier this year. The aim of the company is to co-ordinate official millennium celebrations in Ireland by creating a sensational festival of festivals from March 1999 onwards. It will be promoted in all of Ireland's key overseas target markets as well as the home market. Boosting inward tourism in 1999 and beyond is a major objective. The company invited festival organisers to come forward with ideas for enhancing their festivals so that a number of key festivals could be linked into the 1999 events, making a single triumphal millennium celebration. The selection procedure will soon be completed and, in light of financial resources available, those selected will be considered for assistance in the form of funding, marketing or operational advice.
The domestic tourism market is our largest tourism market. Last year tourism earnings from this market amounted to £670 million, an increase of 16 per cent over the previous year. It is a fact nowadays that many more Irish people take an overseas holiday. However, with the strength of our economy, it is also true that growing numbers are in a position to take a second holiday or an extended break. I mentioned already the need to attract visitors to the regions and in this area, domestic tourism plays a vital role. Some 60 per cent of domestic tourism expenditure is in the western areas of the country, from Donegal to Cork. An added attraction for the industry is that these extended breaks are usually taken in the off-peak season. I am anxious that we spread the message that there is no more attractive place for that break or second holiday than here in Ireland. This year's regional tourism marketing initiative was launched in January with an Exchequer allocation of £500,000. One of the aims of the initiative is to encourage people to take short breaks in the off-season. The spring campaign ran until the end of May and the autumn campaign is now under way with extensive radio, television and press coverage.
Earlier this year we were provided with a once in a lifetime opportunity to promote our country as never before when we hosted the first stages of the Tour de France. This was the biggest single sporting event to be staged here and the world spotlight was on Ireland with 35 television channels covering the race to an estimated audience of 950 million viewers. Another major event on this year's calendar was the visit in August of the final leg of the Cutty Sark Tall Ships race. Yet another great boost for Irish tourism will be Ireland's hosting of the Ryder Cup matches in 2005. I recently completed negotiations on an eight year promotional programme associated with the event which will advance internationally Ireland's position as a golf tourism destination.
