Wednesday, 11 October 2017

Questions (3)

Robert Troy


3. Deputy Robert Troy asked the Minister for Transport, Tourism and Sport if he will increase the tourism marketing budget to mitigate the decline in visitor numbers from the UK in view of the decline in visitor numbers experienced in 2017; and his views on whether the capital budget for tourism development is adequate to deal with the emerging difficulties in the sector. [42239/17]

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(Question to Minister for Transport, Tourism and Sport)

These questions were tabled prior to the budget. I acknowledge that yesterday we saw a small increase in the tourism and marketing budget to mitigate against the decline in visitor numbers from the United Kingdom in light of Brexit. Will the Minister outline specifically how much additional funding will be allocated to Fáilte Ireland and Tourism Ireland for advertising and marketing in light of Brexit? Will additional staff be hired or what is the Government's plan? Since Brexit we have had no plan to deal with the sharp decline in visitor numbers from the United Kingdom.

That is a fair question and one which I suspect will be asked and answered continually in the months ahead, and it is fair that this should be monitored monthly. I welcome the overall growth in visit numbers to Ireland in the first eight months of 2017. However, the decline in the numbers visiting from Great Britain continues to be a concern. While growth from North America, mainland Europe and other markets has allowed us to maintain upward momentum, it is important that we would take appropriate action to address the Great Britain decline.

Overseas marketing is vital for tourism. While recent tourism performance has been strong, research in our key overseas markets has indicated that Ireland’s share of voice needs to be strengthened. To that end, I have secured €2 million in budget 2018 for digital investment in tourism marketing, both to help restore Ireland’s share of voice vis-à-vis its competitors and also to develop growth from alternative markets. This is critical in the context of Brexit and the decline in visitors from Britain.

Tourism Ireland and industry partners, working in collaboration with Fáilte Ireland, have implemented a series of actions in the Great Britain market to address the implications of Brexit and the fall in the value of sterling. For example, a greater focus has been placed on culturally curious visitors, who are less impacted by currency fluctuations, and highlighting off-season breaks and value offers. As well as this, Tourism Ireland is continuing its market diversification strategy. This aims to attract more visitors from markets which deliver longer stays and, therefore, higher revenue returns. This strategy is bearing fruit, as evidenced by the significant increase in visitors from North America and other markets thus far in 2017.

The existing capital plan for 2016-2022 provides an allocation of almost €126 million for tourism product development. Fáilte Ireland's tourism investment strategy 2016-2022 lays out the funding streams and delivery mechanisms for this allocation. I am pleased to have secured an additional allocation of almost €33 million for tourism product development in the mid-term review of the capital plan, bringing the total amount available to almost €160 million. This capital budget will contribute significantly to the development of the tourism sector. In line with the tourism commitments in A Programme for A Partnership Government, this capital budget will enable Fáilte Ireland to invest in the further development of the signature experience brands, including the Wild Atlantic Way. It will also allow Fáilte Ireland to progress the development of a brand for the Lakelands region as a separate proposition to sit alongside the Wild Atlantic Way and Ireland’s Ancient East. I assume that last sentence has great appeal to Deputy Troy.

The overall growth in our tourist numbers is welcome, but that is largely due to the huge increase in the number of US visitors. That usually depends on favourable exchange rates. That exchange rate can fall in the same way as the UK visitor numbers have fallen. Unfortunately, what I understand from the Minister's reply, and he can correct me if I am wrong, is that only a measly additional €2 million will be invested in marketing next year. The capital funding of up to €33 million that he mentioned will be spent over a period of five years over the duration of the next capital plan. An allocation of €2 million is not adequate for the amount of marketing that needs to be done in the UK and in mainland Europe to compensate for the loss in UK visitor numbers. Did the Minister have an opportunity to read the submission forwarded in advance of the budget by the Irish Tourism Industry Confederation, the representative body working with the many stakeholders in the tourism sector? When we consider what the Minister has delivered, it does not go anywhere near addressing the serious issue of the fall in UK visitor numbers.

While I accept the genuineness of what the Deputy said, he should not expect anybody on any side of the House to anticipate currency movements. As he rightly pointed out, the reduction in visitor numbers from the UK has been compensated for partly by the visitor numbers from the US. Also, what is happening within Fáilte Ireland is something very commendable. It will receive €2 million and will also receive a massive capital injection over the next five years. It would be wrong to dismiss the four years after this year and say that it is not part of the equation. That will be very important because the consequences of Brexit will be permanent and long term. What Fáilte Ireland has done is to enter and extend its diversification of markets campaign and we have seen from it that it is concentrating on markets where they are bigger spenders than the UK and where revenue is greater. Let us not be too depressed about this. The increase from all these other countries is to be welcomed. The figures were up from nearly every other sector.

Go raibh maith agat.

Just one more second-----

The Minister will have to use his remaining minute to make that point.

I will use it to give those figures because they are very important.

The tourism industry is the largest indigenous one on our island. However, it is not given the recognition that it deserves. I acknowledge the retention of the 9% VAT rate. My party supported that and I am glad that the Government retained it. It is part of the package, but an allocation of €2 million for the marketing budget to address the severe drop in UK visitor numbers does not cut the mustard. While the allocation of €33 million over five years is welcome, that is only €6 million per year in additional capital expenditure. Any county which any of us represents and any of our constituencies would spend that €6 million in a couple of months.

I welcome the fact that the Minister is coming around to the Lakelands brand and the €1 million that is being addressed to that. When will that brand be up and running? Will staff be assigned to the development and implementation of that brand? How will that €1 million be spent? Last year, Fáilte Ireland gave County Longford €2,000 towards marketing, the lowest for any county.

While it is doing great work, there are areas which need to be addressed.

The Deputy is rightly acknowledging the work which has been done. I would like to be able to allocate large sums of money to every part of my Department. The competing interests are vast. I remind the Deputy that the tourism marketing fund for 2017 is not €2 million; rather, it is €36 million. Let us not pretend-----

I refer to the increase.

The Deputy is correct about the increase being only €2 million, but there is €36 million on top of that. It is a lot of money to spend on marketing and it has been used well. In some ways it has proved how successful it has been by having brought so many visitors to Ireland. I have no doubt it will continue to use the money successfully.

I am glad that the Deputy has acknowledged that the tourist industry and lobbying from Fáilte Ireland and Tourism Ireland on the issue of VAT has been extremely important. In discussions with the Government, my Department and I maintained that the VAT rate should remain at 9%. It is absolutely vital for the smaller hospitality part of the industry.

We must continue to warn the larger hotels throughout Ireland that if they are price gouging and taking money from people in an opportunistic way that is damaging the interests of the country, we will be obliged to reconsider the advantages from which they are benefitting. It is not intended to increase the 9% VAT rate for the tourist industry as a whole.