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 Header Item Regional Airports (Continued)
 Header Item Tourism Industry Issues

Thursday, 20 December 2012

Dáil Éireann Debate
Vol. 787 No. 5

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Deputy Luke 'Ming' Flanagan: Information on Luke 'Ming' Flanagan Zoom on Luke 'Ming' Flanagan I thank the Minister of State for his answer. There are serious concerns about statements made in recent weeks, including a statement in the national media on 31 March. Only one meaning could be taken from the Minister, Deputy Varadkar's statement, namely, that the pesky airport at Knock would want to stop taking passengers from Shannon. The Minister stated:

If nothing was done for Shannon the airport stood in danger of being passed out by Knock airport in passenger numbers, despite a current gap of over 900,000 passengers. I think if the trends continue as they are it will happen because Shannon’s numbers are already down 20 per cent this year and Knock is still growing.

The last sentence of his statement was interesting. He stated: "It is only a matter of time without a change in policy."

  I would cheer on developments at Shannon Airport, but if that must be done at the expense of Knock airport, which is washing its face financially, it would not be good. A couple of weeks ago, Mr. Liam Scollan of Knock airport told a meeting of our transport committee that he had serious concerns about the quality and level of engagement with the Government. He stated:

We have met Minister Varadkar and his officials on numerous occasions, but our representations have not been afforded fair consideration [which is a fair claim]. In fact, the Minister is clearly on the record in both national and local media [as I have quoted] that Knock Airport was the problem for Shannon and that he intended to develop policies to rectify that.

This does not make sense. Knock airport should not be punished for being a success. It is one of the few entities in the area in which I live that has done well. We have watched as Garda stations, post offices, etc., have closed down, but the airport is a beacon of hope. I am sure the Minister of State, Deputy Ring, agrees. The airport offers us phenomenal opportunities in terms of developing tourism in areas that not only are not saturated by tourism, but where tourism does not even exist. Instead of punishing Knock, why not develop a plan that helps all of the airports in question? The ones that work the best should be encouraged to thrive. Do not treat them as if they are some sort of nuisance to Shannon Airport. Doing so will not work for any airport.

Deputy Alan Kelly: Information on Alan Kelly Zoom on Alan Kelly I thank the Deputy for his comments. He has spoken on this issue previously and he holds his opinion passionately. Knock airport is not under threat. It is a fine, successful airport, a fact that must be acknowledged. The Deputy's references to statements by my colleague, the Minister, should be taken in context. Those comments were more a reflection on Shannon's situation than on Knock's success. Shannon is a world renowned brand. As an airport, its achievements are known worldwide. However, its passenger numbers have dropped considerably, and it was in this context the Minister commented.

A change in policy in respect of Shannon Airport was necessary. For this reason, the Government has put together a plan that should have been put in place many years ago. I advocated for such a plan for many years. There is some associated risk, but the plan will be a success and it will not be a threat to Knock airport. I am sure that the airport will achieve even more success. Shannon Airport has successfully won a number of new flights from the US and Europe. These do not compete with Knock but complement the services available there.

Deputy Luke 'Ming' Flanagan: Information on Luke 'Ming' Flanagan Zoom on Luke 'Ming' Flanagan Please ask the Minister to engage more. The relevant people feel he is not engaging. They are reasonable and good people.

Deputy Alan Kelly: Information on Alan Kelly Zoom on Alan Kelly I will take that message to him.

Acting Chairman (Deputy Peter Mathews): Information on Peter Mathews Zoom on Peter Mathews This morning, Sir Terry Wogan gave Shannon Airport a good boost on "The John Murray Show".

Deputy Luke 'Ming' Flanagan: Information on Luke 'Ming' Flanagan Zoom on Luke 'Ming' Flanagan He is biased.

Deputy Michael Ring: Information on Michael Ring Zoom on Michael Ring He supported The Gathering.

Acting Chairman (Deputy Peter Mathews): Information on Peter Mathews Zoom on Peter Mathews He lives in Limerick even though he supports Shannon and County Clare.

Tourism Industry Issues

 4. Deputy Timmy Dooley Information on Timmy Dooley Zoom on Timmy Dooley asked the Minister for Transport, Tourism and Sport Information on Leo Varadkar Zoom on Leo Varadkar the way he will help put in place a viable hotel industry; and if he will make a statement on the matter. [57534/12]

Minister of State at the Department of Transport, Tourism and Sport (Deputy Michael Ring): Information on Michael Ring Zoom on Michael Ring The Government has implemented a range of measures to support the tourism and hospitality industry, including hotels. VAT has been reduced to 9% on accommodation and restaurant services and this lower rate will continue throughout 2013. The visa waiver scheme is encouraging visitors from emerging markets to add Ireland to their trips when they are visiting the UK. Also, the halving of employers' PRSI for those on modest wages has reduced the cost of employing people.

In 2013, the Government will spend almost €140 million through its agencies to support the tourism industry, to market tourism at home and abroad and to support product development. Fáilte Ireland also provides a range of business supports to tourism enterprises. These supports cover areas such as financial advice, business mentoring, productivity improvement, cost control, sales and marketing, e-business and customer care. They also assist tourism businesses to engage constructively with their banks. I am also glad to see that, in 2011, hotel room occupancy rose. Combined with better cost control, profits per available room before tax rose by over 22%.

In the context of recent budgets, the Minister, Deputy Varadkar, has signalled his intention to have further discussions with the Minister for Finance on the possible involvement of hotels in the extended employment and investment incentive scheme, EIIS, and the real estate investment trust, REIT, initiative. As the Deputy is aware, 2013 is the year of The Gathering and the tourism industry, particularly the hotel sector, will be able to benefit from it fully.

Deputy Timmy Dooley: Information on Timmy Dooley Zoom on Timmy Dooley I welcome the Minister of State's reply. I acknowledge some of the work the Government has done in assisting the tourism industry at a particularly difficult time.

The Irish Hotels Federation, IHF, has published a policy document on the future of the hotel industry. As the Minister of State will be aware from his knowledge of that industry, the report was compiled by Dr. Alan Ahearne, who has considerable experience in the sphere of economics and possesses an understanding of the potential for growth. It is clear from the report that the hotel sector in particular is under strain. We all know of examples of hotels that were built in the wrong locations. In trying to survive, they dislocate business to their areas, offer rates that are lower than are commercially viable and are involved in the NAMA process, which will take time to be resolved. They are placing a strain on what might be referred to as "Mom and Pop" hotels, family-run businesses that did not get caught up in the crazy property game but now find it almost impossible to compete.

While I accept that The Gathering will have an impact, it will not resolve the long-term issue. The situation will not be too bad in the large cities. There is a strong demand for hotels in Dublin in particular. However, hotels in the more peripheral and, one might say, scenic areas are under significant pressure.

Does the Minister of State believe that the EIIS could be extended to include restructured hotels? This move was called for by the IHF. As the Minister of State knows, hotels cannot qualify for the scheme currently. Would he consider recommending to the Minister for Finance, Deputy Noonan, the inclusion of an extension of this scheme in the Finance Bill? The qualifying investor fund specially designed for restructured hotels can be attractive for private investors, in particular foreign investment. There is some appetite in this regard. Another way to break the logjam in the hotel market would be to invest moneys from the National Pensions Reserve Fund, NPRF, in the dedicated hotel restructuring fund.

Dr. Ahearne's report outlines a number of positive initiatives. One recommendation called for the State to invest heavily, but I do not believe that would fly. Will the Minister of State comment in this regard?

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