Committee Reports > List of Committees > Dáil > 1987 > Committee on Public Expenditure > Report No. 23 - Review of Public Expenditure on Tourism

Appendix I

CONFIDENTIAL

DRAFT INTERIM REPORT ON TOURISM TO THE DAIL COMMITTEE ON PUBLIC EXPENDITURE BY THE TOURISM GROUP OF THE BUSINESS ADVISORY PANEL

MARCH 1986

INDEX

APPENDICES

HIGHLIGHTS

DIRECT GOVERNMENT EXPENDITURE ON TOURISM IS £30 MILLION PER ANNUM OF A £1 BILLION INDUSTRY EMPLOYING SOME 80,000 PEOPLE AND CONTRIBUTING ALMOST £400 MILLION TO THE EXCHEQUER BY WAY OF TAXATION.

○Approach by Tourism Group concentrated on maximisation and effectiveness of Tourism Industry.

○Major savings unlikely within Government’s spend on tourism (£30 million).

○Consultancy assignment to review Tourism (White Paper) offers unique opportunity for comprehensive study and terms of reference should not be restrictive.

○Tourism is likely to be the worlds biggest industry by the year 2000. Ireland’s share of world tourism has been declining in recent years, particularly from the United Kingdom. Ireland’s share of U.S. tourism expenditure in Europe declined from 2.9% in 1974 to 2.1% in 1983, a decrease of 28%. Corrective action is urgently required to reverse these adverse trends.

○There appears to be a positive co-relation between out of state tourism revenue and expenditure on promotion. Estimate of pay back from promotion would suggest that considerably more promotion resources should be made available to Bord Failte.

○Initiatives are required to stimulate investment in tourism development and it is suggested that the 10% rate of Corporation Tax be applied to defined out of state tourism revenues and that capital allowances for specified new projects be increased to 120% for a period of three years.

○Tourism is job orientated and its expansion will consequently ensure job creation. The cost of job creation within the Tourism Industry is significantly less than in manufacturing industry or agriculture.

○Effectiveness of Tourism can be enhanced by improvement of tourism product. Investment in infrastructure, facilities, buildings, amenities, etc is required. Within Dublin a modern flexible Conference & Exhibition Centre and Sports Complex would be helpful to tourism development. Investment in the foregoing creates an immediate benefit to the economy particularly the Construction Industry.

○The environment is of primary importance to the overall tourism product and continuing corrective action is required.

○To make Ireland a safe haven for tourists, every effort must be expended to combat crime.

○It is considered that access costs, particularly air fares, remain a serious negative to tourism growth and that they should be urgently examined by Government not in isolation but in relation to the totality of tourism.

○The stabilisation of Ministerial responsibility for tourism is urged and very se linkages between relevant Government Departments, Local Authorities, and the Tourism Industry are considered imperative.

TOURISM

1. INTRODUCTION

1.1DIRECT GOVERNMENT SPENDING ON TOURISM IS £30m PER ANNUM ON A £1 BILLION INDUSTRY EMPLOYING SOME 80,000 PEOPLE AND CONTRIBUTING ALMOST £400m TO THE EXCHEQUER BY WAY OF TAXATION.

The Dail Committee on Public Expenditure is charged with examining inter alia the government programme on Tourism with a view to recommending changes which will render it more cost effective.

The Tourism Group was set up to review tourism on behalf of the Business Advisory Panel to the Dail Committee on Public Expenditure and to prepare a confidential briefing document for the Dail Committee on Public Expenditure.

1.2Composition of the Tourism Group

1.3A comprehensive White Paper on Tourism Policy was issued on 27 September 1983 and the White Paper has, together with certain other available tourism data, formed the basis of the comments contained in this interim report. The data used has not been the subject of independent confirmation/validation/verification by the Tourism Group.

2. APPROACH ADOPTED BY TOURISM GROUP

The task was initially approached on two levels:

2.1Tourism Industry Policy

Examination of the White Paper on Tourism Policy to

○focus on critical issues

○comment generally on effectiveness.

2.2Direct Government Expenditure on Tourism

Review what action might be taken to optimise the current direct government expenditure of £30m incurred on tourism.

3. MEETINGS OF GROUP

3.1The Group met 8 times during January/March 1986.

3.2It became evident very quickly that the Group would be more effective if it concentrated on 2.1 above. This view was reinforced by the decision of the government, contained in the White Paper, to seek the services of a consultant with international experience to examine the effectiveness of all directly tourist related public expenditure. The group supports strongly this decision but would hope that the terms of reference will not be too narrowly defined (See 4.2 below - paragraph 6).

3.3In view of the limited information generally available to the Group it was not possible to critically examine the current direct government expenditure on Tourism in the amount of £30m, but comments and observations are set out in 4 below.

3.4The main deliberations of the Group centered around the fact that tourism is a major industry in itself with considerable potential to increase foreign earnings and create further employment. The primary objective therefore was to identify ways of making the industry larger in a cost effective manner. The following critical issues were addressed and related to the White Paper:

○World tourism market - Irish Market Share.

○Growth of Tourism Industry - Job Potential - Tax Yield.

○Quality of Tourism Product

○Effectiveness of promotion.

○Access Costs.

○Effectiveness of linkage between Government, Semi-State and Private Sector.

4. DIRECT GOVERNMENT EXPENDITURE ON TOURISM

4.1The direct current government expenditure on Tourism amounts to £30m and is made up as follows:

4.2Bord Failte accounts for 92% of direct government expenditure on Tourism. Copy of Income and Expenditure account for year ended 31 December 1984 is attached (Appendix 1).

Bord Failte has during the past 5 years been carrying out a cost effectiveness programme and the total staff numbers of Bord Failte and the regional tourism organisations have been reduced from 575 persons employed to 466 persons employed. Within the next three years it is envisaged by Bord Failte that there will be a further reduction of personnel and some reductions in fixed costs. We understand a plan is already in effect for reducing the subvention to the regional tourism organisations, increasing their revenue from commercial activities, and centralising their administration using the Bord Failte computer facilities.

Bord Failte funding of regional tourism organisations is presently 60% and it is planned that this will reduce to 55% in 1987.

Bord Failte has in the past been subjected to inflexibility in regard to budget spending insofar as any cost savings in personnel, for example, could not be re-deployed in promotional expenditure. This inflexibility has now, we are advised, been removed which must be helpful.

The Department of Tourism, Fisheries & Forestry, through its tourism division monitor closely the operations of Bord Failte which consequently involves considerable time being taken up by Bord Failte personnel in providing information and in dealing with departmental queries. It is felt that there must be scope for streamlining tourism effort with a view to reducing the apparent bureaucracy and becoming more effective.

As mentioned in paragraph 3.2 of this interim report, the Government has decided to seek the services of a consultant with international experience to review the effectiveness of all directly tourist related public expenditure. The mandate of the consultant will be to supplement ongoing rationalisation programmes and to assist the relevant organisations and the Minister in devising, within present budgetary constraints, innovative means of attracting tourists to Ireland. As already indicated, it is to be hoped that the Terms of Reference will not be too narrowly defined as the assignment correctly offers a unique and very timely opportunity for a detailed independent assessment of all areas of the Tourism Industry and its obvious potential in job creation and contribution to the economy. The Tourism Group would feel that the thrust of the consultancy assignment should be towards the maximisation and effectiveness of the Industry encompassing all inter-related areas such as access costs and obvious environmental issues.

It should also be mentioned that even within present budgetary constraints, and assuming that some economies can be made, and given full flexibility for Bord Failte, it is likely that there will still be a lack of financial support for improvement of the tourism product and particularly for promotional expenditure (this latter matter is dealt with in 8 below). The stringent financial situation also decrees that resources available for Capital projects be restricted. This can only be seen as unhelpful to an industry that is in need of significant investment as deta elsewhere in this report.

4.3Current government expenditure in respect of tourism related activities administered by the Shannon Free Airport Development Company Limited is in excess of £2m. There would appear to be some duplication of marketing activity by SFADCO with Bord Failte, particularly in North America, and it may well be that there is a duplication of effort in relation to certain other activities. Clearly any duplication of expenditure and activity cannot be cost effective and whereas savings may not be substantial, it is an area that should be examined.

5. WORLD TOURISM MARKET - IRISH MARKET SHARE

Tourism is likely to become the worlds biggest industry by the year 2000 and the outlook for international tourism is promising. The existing world market for tourism is estimated to be in excess of US$100,000 million. A number of forecasts of international tourism have been prepared by organisations such as the World Tourism Organisation and the European Travel Commission which in general suggest an annual increase in the region of 3% to 5% until the end of the decade.

As shown in 6.1 of this Interim Report, there has been a decline in out of state tourism revenue during the 20 years to 1984. Within the same period there has however been a significant increase in out of state tourism revenue from North America but again if one relates the percentage market share of total U.S. tourism expenditure in Europe by Country, Ireland’s share has declined from 2.9% in 1974 to 2.1% in 1983, a decrease of almost 28%.

PERCENTAGE MARKET SHARES OF TOTAL US TOURISM EXPENDITURE IN EUROPE BY COUNTRY

Source: U.S. Department of Commerce, Survey of Current business.

Tourism numbers in revenue terms for 1974 to 1984 are set out in Appendix 2 and whereas these statistics obviously show an increase in revenue terms they also show an increase in the number of tourists. However, in terms of market share of an increasing world market for tourism Ireland’s position has eroded.

clearly there is opportunity to regain lost market share and this the Tourism Group, suggest should be a major priority of the Industry.

6. GROWTH OF TOURISM INDUSTRY - JOB POTENTIAL - TAX YIELD

6.1As detailed in the White Paper the 1960’s was a period of relatively steady growth in out of state tourism revenue which reached a peak in 1968 and 1969 (See below).

OUT OF STATE TOURISM REVENUE 1964 - 1984

(1984 CONSTANT TERMS)

£m

N.B.(i)Total revenue includes carrier receipts, excursionists and other markets

(ii)Converted to 1984 values on basis on average annual consumer price index.

The beginning of the Northern Ireland troubles in 1969 led to a sharp drop in revenue particularly from the United Kingdom. Apart from 1979 total revenue from out of state tourism has been below the 1968 figure. Tourism revenue from the United Kingdom in 1984 amounted to only 67% of revenue in 1968 in constant terms a decline of 33%.

The White paper sets out targets for Tourism receipts for 1985, 1986, and 1987 based on the outcome for 1984. The target set for 1985 has been exceeded by over 6% based on preliminary figures from Bord Failte. It would seem that targets for 1986 and 1987 should be revised with greater emphasis on market share and achieveable potential growth rather than on the outcome of 1985; targets should also be set at this stage for a further 3 years i.e. 1988-1991.

6.2It is commonly accepted that the service industries will in the future be the creators of employment with little growth in industrial employment due to technological advancement and no growth in agricultural employment expected.

Exchequer expenditure on Industry and Manpower amounts to IR£608m, on Agriculture IR£394m and on Tourism, it amounts to a mere IR£30m. The annual cost of Government support for jobs in Industry is just under IR£2,000 per job, in Agriculture the figure is IR£2,150 per job whereas in direct Tourism it is approximately IR£850 per job. In relation to many of the jobs indirectly created by Tourism there is effectively little or no Government support.

Within the service industries, tourism currently creates directly and indirectly some 80,000 jobs and the White Paper envisage this increasing 1.5% per annum during the next two years. Clearly there is a co-relation between the growth in tourism and the creation of tourism employment. It seems therefore that every effort should be made by government to expand tourism with consequent benefits in employment creation.

6.3Taxation arising from tourism is an important source of exchequer revenue and provides a significant income to the government. Export tourism expenditure, like other exports, is an important stimulus of the national economy. The exchequer benefits initially through taxation on goods and services which tourists buy directly. To an even greater extent, the exchequer reaps secondary benefits through taxation on the economic activity which tourism stimulates.

The primary tax take by the exchequer from export tourism spending (excluding carrier receipts) increased from 12% in 1975 to 21% in 1984. In 1984 the primary tax take amounted to an estimated £92m.

The impact of government fiscal policy between 1975 and 1984 has meant that tourism expenditure has contributed increasing proportions of the total revenues collected by the exchequer from indirect taxation. In 1975 VAT on tourism earnings contributed 2.6% of total exchequer receipts from this source. In 1984 the proportion had increased almost 5% and it now amounts to approximately 4%.

The secondary tax contribution to the exchequer arising from the ‘downstream’ activities (stimulated by the initial export tourism spending) are considerable. The contribution estimated in 1984 amounted to £137m.

In 1984 export tourism (excluding passenger receipts) contributed some £229m in tax from the direct and indirect effects of tourism spending. Taxation on tourism is significantly higher than on any other export sector. Tourism generates twice the taxation yield from merchandise exports.

Including the gross primary tax yield from spending on domestic holidays and the tax yield from carrier receipts, the total gross tax revenues to the exchequer through the direct and indirect effects of visitor and home holiday spending in 1984 contributed some £356m to the exchequer. The projected figure for 1985 is £386m.

TOTAL PRIMARY & SECONDARY TAX YIELD *

*Further tax receipts arising from Government spending of these revenues not included

**Projected

***Gross tax yield.

(Source: Report on Tourism and Taxation - Irish Tourist Industry Confederation).

6.4The reductions in VAT introduced in the 1985 Finance Act and included in the 1986 budget have been and will be helpful to the development of tourism. Principally the revised VAT rates will help us competitively with other European destinations in respect of such taxes.

Despite the significant increase in Exchequer Revenue from tourism over the past number of years, the tourism industry has in general not generated adequate profitability. This has been one reason for the lack of investment in tourism development. In 1984 for example only 42% of hotels made a profit while 34% made a loss and 24% broke even (Bord Failte Eireann - The Irish Hotel Industry Inter-Hotel comparison - October 1985). Profitability is essential if the private sector is expected to make significant contribution to tourism development in the future.

Ireland’s position as an island and secondary tourist destination makes it a hard sell in marketing terms and repeat business would appear to be low. Ireland as a holiday location probably has greater appeal to the older type tourist and there is clearly a need to improve the tourism product to attract more tourists and to obtain more repeat business. To achieve the above there is a requirement for significant investment in the tourism product. To obtain the necessary investment there must be an economic climate that will stimulate such investment particularly from the private sector. The expansion of the tourism industry has immediate benefits for the economy both in foreign currency earnings and job creation. The benefits to the Exchequer in respect of tourism are significant and tourism expansion will mean increased Exchequer Revenue.

The Tourism Group, while accepting that the Government has assisted the industry in competitive terms by reducing V.A.T., believes that initiatives are now required to stimulate investment in tourism development. Some suggested initiatives in the form of tax incentives/reliefs are set out below:

○CORPORATION TAX

To stimulate effort by the tourism industry to increase its declining share of world tourism it is suggested that the 10% rate of Corporation Tax, as applies to manufacturing industry, be applied to defined out of state tourism revenues.

○CAPITAL ALLOWANCES

As effectively no grants are available within the tourism industry, it is suggested that capital allowances in respect of specified new projects be increased to 120% for a period of 3 years. Significant capital investment is required within the industry, and 3 years is suggested because of the longer time scale of relevant capital projects.

○ADVANCE CORPORATION TAX

To attract investment into tourism, conditions and terms must be reasonably attractive. The imposition of ACT, which is in direct conflict to capital allowances, is however a negative to investors and investment. It is suggested that exemptions/extensions be made available in specified tourism activities in order to ensure that the imposition of ACT does not discourage capital investment.

○BUSINESS EXPANSION SCHEME

Again to stimulate investment and thereby job creation it is suggested that the business expansion scheme be extended to include specified tourism activities. Within the United Kingdom, for example, the business expansion scheme applies to service industries generally.

7. QUALITY OF TOURISM PRODUCT

Tourism while providing great opportunity also provides great challenge. As detailed elsewhere in this Report, Ireland’s share of world tourism has been declining. Apart from promoting Ireland as a holiday destination, to be successful in getting repeat business from our visitors, the tourism product must be of high quality and must be value for money. Comparatively little investment has taken place within the tourism industry over the past several years and there is now an urgent need to create awareness of the needs of the industry and to make significant investment in order to restore our share of the world tourism. To be successful in tourism, there must be tourist orientation and co-ordination.

The need for product improvement is apparent and the appropriate economic climate must be created to make investment in tourism attractive. Product improvement in the improvement of infrastructure, facilities, buildings, etc also creates an immediate benefit within the economy particularly in the area of employment creation. Government Departments concerned with the environment and Local Authorities must become more tourist orientated.

The Government’s proposal to give full licences to restaurants is welcomed. It is essential that action be taken on this matter immediately. A decision in principle was set out by Government in “Building on Reality” in October 1984. If it is not implemented by the end of April 1986 it will not be possible to use it as a selling point with Tour Operators for the 1987 season, as all the major Tour Operators will have completed their plans for the 1987 season not later than the end of May 1986.

The White Paper stated “the environment is of primary importance to the overall tourism product. The economic and employment benefits of Tourism would be severely eroded if environmental conditions were permitted to decline. Careful management of the environment is therefore an economic necessity as well as a social issue”. Notwithstanding the fact that Ireland may be cleaner and less polluted that other holiday destinations, there is certainly considerable scope for improvement. Litter and water pollution, increasing noise levels, unsitely development, and to some extent air pollution have all reduced the attractiveness of our environment. Derelict and decaying sights are a common place within many of our cities. A co-ordinated policy involving our education system, local authorities, government, and all concerned is necessary to ensure that positive action is taken, on a timely basis, to correct environmental negatives.

Crime, particularly vandalism, theft, and car theft, has increased significantly over the past ten years and remains an area of serious concern to our tourists. A crime free society would considerably help our tourism promoters and whereas it is probably impossible to eliminate crime every effort must be made by all concerned to reduce it to a sustainable level.

The traditional landscape of the country has been adversely affected by housing developments which are out of sympathy with traditional Irish buildings. It is important for the future of Irish tourism that the unique sense of Ireland be maintained throughout the countryside and co-operation between the Planning Authorities and local tourist interests is urgently needed.

Apart from Ireland’s scenery, its major assets include our lakes and rivers. Fishing is a growth tourism attraction and within Ireland there are many highly attractive lakes and rivers which have great potential for attracting more tourists particularly in the shoulder seasons. Netting, however, at sea and at the estuaries of our rivers, has in recent years been so severe that few salmon are able to reach their river destinations and consequently salmon stocks within our rivers have declined dramatically. Clearly the value added potential of developing inland fishing is enormous as compared with the small economic return from the present excessive netting of salmon. It is submitted by the Tourism Group that Government should urgently review existing fishery policies in the context of both the fishing industry and the tourism potential and should take appropriate action to maximise overall economic return.

Clearly there are many areas within the environment where improvement will ensure considerable tourism benefit. There is a general need for product improvement within an industry that is becoming increasingly competitive. In addition to infrastructural improvements which have an immediate positive effect on the economy, there is also a need for the provision of greater facilities and amenities particularly to attract tourists in off peak periods. Within Dublin the provision of a modern flexible Conference & Exhibition Centre and Sports Complex would be helpful to tourism development. There is clearly considerable scope for partnership to be created between government and local authorities with the Tourism Industry and the importance of creating an awareness of tourism potential cannot be overstressed.

8. EFFECTIVENESS OF PROMOTION

The relationship between promotional spending and sales even in the most commercial of activities is often difficult to measure precisely. However, there is no doubt that promotional spending is of vital importance in increasing market share and the vast sum spent on advertising and other form of promotion are evidence that this is the experience of many businesses.

With tourism, it is less easy to measure the response of demand to the various factors which effect final demand. A person making a decision to holiday in a particular country must be in possession of certain favourable impressions of the country. These favourable impressions arise for many countries from a combination of many factors. For example, the image of Britain is continuously being propagated throughout the world. Its history, language, and culture are constantly being deseminated throughout the world by television programmes, films, educational services, worldwide radio services and its predominance in many social and industrial areas.

The situation in Ireland is very different. Comparatively little is known about Ireland apart from adverse publicity in the foreign media over the past 15 years as a result of the Northern Ireland situation. The primary objective in many of our markets is to increase and diffuse information about Ireland. Some 80% of the visitors to Ireland are initially attracted by the scenery whereas departing visitors recollection of Ireland relates to its people. A sizeable proportion of Bord Failte’s promotional efforts has to be directed to foster knowledge of the country and to create a favourable image of Ireland. Because of the lack of knowledge about Ireland and because of our relatively small size, Ireland is promoted as a single tourism destination rather than as a collection of individual regions as is done is some other countries.

While there are many factors which influence tourism, there appears to be a positive co-relation between out of state tourism revenue and expenditure on promotion. Bord Failte estimate that every extra £1m spent on promotion will produce up to £10m of tourism revenue which of itself will contribute significantly to the Irish Exchequer. A comparison of Bord Failte’s budget with tourism revenue shows that changes in budget are paralelled by changes in revenue (See Appendix 3).

Measurement of effectiveness is difficult, but studies of particular advertising campaigns indicate that the expenditure of tourists who come to Ireland after responding to coupons keyed to Bord Failte advertisements is 20 times the costs of the advertisements. Bord Failte within its existing budget provides for all fixed costs and overheads and additional resources could therefore go, for example, straight into promotion. The estimate of pay back from promotion as indicated above would therefore suggest that considerably more promotion resource should be made available to Bord Failte.

9. ACCESS COSTS

Chapter 16 of the White Paper, Paragraph 16.2 states the cost to the tourist of access is one of the major elements contributing to the cost of holidays in Ireland. It is therefore essential that tourist fares on sea and air access routes are competitive and not out of line with those to rival destinations from the main tourism generating countries. As might be expected where this country’s access costs rise out of line with those who are principal competitors tourist numbers and receipts from the originating countries concerned are adversely affected. In the interest of maintaining Ireland’s international competitiveness it is necessary that particular attention be given to ensuring that a range of competitive fares are available to support the promotional and marketing efforts of the Irish Tourism Industry.

Access fares, particularly air fares, would appear to have been a major negative as far as Irish tourism expansion is concerned. Uncompetitive air fares, principally, according to EIU Study have resulted in the loss some 900,000 visitors between 1975 and 1983.

Air transport policy is an extremely complex area and it has been the subject of much discussion within Europe. The Commission of the European Communities has produced detailed memoranda on air transport policy. Its Civil Aviation Memorandum No. 2 which looks for a European air transport policy (providing for real competition between airlines but stopping short of total deregulation as practised in the United States) is presently under consideration by the EEC Economic & Social Committee. If nothing materialises by the end of 1986, the matter may be taken to the European Court. Action by that body would amount to imposing competition by legislation.

Ideally the absolute level of fares for travel to Ireland should at most equate the cost of travel to competitive destinations from our main source markets and in many cases it is desirable to be perceived as having cheaper access to overcome the physical disadvantage of being an island destination.

A general examination of the overall traffic patterns to Ireland shows that over the longer term, air travel has being losing out significantly to sea and in some cases the loss of air traffic has not been just a transfer to sea but rather a loss to Ireland itself. This is undoubtedly to a large part attributable to the relatively high increases which have occurred in air fares, principally European, over the recent years in contrast to low Transatlantic and United States air fares. There would also appear to be concern that the effective duopoly on the Irish sea could lead to similar increases in surface traffic costs with consequent loss of considerable tourism revenue.

The EIU study, as mentioned above, also indicated that in relation to the four major markets for Ireland, the United States, the United Kingdom, France and West Germany, a 10% increase in the relative cost of travel to Ireland and costs within Ireland produced a drop of almost one third of our share of travel from these countries. The implication is that if the cost of travel to and within Ireland remain the same relative to other destinations as it was in the mid 1970’s the current number of visitors to Ireland would be more than half as much greater again. Thus, prices in Ireland and the cost of getting to Ireland are major factors in the development of the Irish tourism Industry.

The decline in tourism from Britain has been mentioned elsewhere in this Interim Report. Holiday air traffic from Britain has declined by almost one half since the early 1970’s compared to a 17% decline in total holiday traffic. Recent events indicate the urgent need for Ireland to take initiatives in the area of air fares since Britain presently offers more attractive air fares with competitive countries to Ireland. A recent examination of air fares indicated that the lowest available fares from London to Irish Airports on a mile for mile basis were the most expensive of all bar two of thirty comparable destinations in Britain and mainland Europe. Given the relative perception of Ireland in Britain and the location of the major market source, it would seem that Irish air fares would need to be lower than fare levels to competitive destinations.

The Tourism Group consider that access costs, particularly air fares, remain a serious negative to tourism growth and that the matter should be seriously examined by Government, not in isolation, but in relation to the totality of Tourism.

10. EFFECTIVENESS OF LINKAGE BETWEEN GOVERNMENT, SEMI STATE AND PRIVATE SECTOR.

As detailed below other than the Department of Tourism, Fisheries & Forestry which has recently taken over responsibility for Tourism there are some 20 Government Departments or State Agencies whose activities may affect Tourism:

○Department of the Taoiseach

○Department of Finance

○Department of Agriculture

○Department of Communications

○Department of Education

○Department of the Environment

○Department of Industry & Commerce

○Department of the Gaeltacht

○Department of Health

○Department of Justice

○Department of Labour

○Bord Failte

○Shannon Free Airport Development Company

○Local Authorities

○Office of Public Works

○Fisheries Board

○National Institutions of Science and Art

○COSPOIR

○Bord na gCapall

○CERT

The above clearly indicates the considerable number of Government Departments and other bodies involved directly and indirectly in tourism. In the White Paper on industrial policy the Government recognise that “the Department of Industry, Trade, Commerce & Tourism must make a greater input to tourism policy rather than leave this process to subsidiary agencies”. However, within a short period of time the responsibility for tourism policy has yet again moved to another Department.

Tourism is an extremely important industry, it is potentially an industry that consequently can create many more jobs, yet successive Governments have in the past number of years moved its responsibility from one Department to another. Such moves are not consistent with the treatment of tourism as an important industry, are disruptive and cannot be effective.

The Tourism Group view with concern these transfers of policy responsibility for tourism that have consistently taken place and would urge that ministerial responsibility for tourism policy be stabilised and so structured as to efficiently inter-act with other relevant Departments, state agencies and the private sector as appropriate, in order to maximise tourism co-ordination and opportunity. Very close linkages are particularly required between the Department of Tourism, Fisheries & Forestry with the Department of Communication in respect of access transport (Aer Lingus, B & I, C.I.E., etc) and with the Department of the Environment & Local Authorities in respect of environmental issues.

APPENDIX 1

Income and Expenditure Account: Year ended 31 December 1984

SCHEDULE 1: Other Receipts: Year Ended 31 December 1984

SCHEDULE 2: Facilities: Year ended 31 December 1984

SCHEDULE 3: Advertising & Publicity: Year ended 31 December 1984

Note 1 (6)

SCHEDULE 4: General Operating Expenses: Year ended 31 December 1984

SCHEDULE 5: Capital Reserve for year ended 31 December 1984

APPENDIX 2

Tourism Numbers and Revenue 1974-1984

* Revised by the CSO.

APPENDIX 3

APPENDIX 4

WHITE PAPER ON TOURISM POLICY

Summary of Proposed Action in the Tourism Policy Statement

Ch.1. Formulation of Tourism Policy

19.1 In future all Departments with functions in relation to tourism will take full cognisance of the needs of the industry and consult with the Department of Industry, Trade, Commerce and Tourism when proposals impinging upon tourism are being considered. (1.5)

Ch.2. Importance of Tourism Industry

19.2 A Joint Working Group comprised of representatives of the Central Statistics Office, CERT and Bord Failte is being established with a view to determining a method to measure actual figures on employment in tourism. The Working Group will report to the Minister for Industry, Trade, Commerce and Tourism within six months. (2.7)

Ch.3. Role of Public and Private Sectors

19.3 It will be a specific policy of Bord Failte to arrange its promotional activities so as to facilitate their joint financing with commercial operators. Existing grant schemes have been revised and differentiated so as to encourage participation in ventures by commercial entities generally. In particular the criteria governing the Amenity Grant Scheme have been amended to ensure such involvement. (3.3)

19.4 Bord Failte in a new strategy will develop brand marketing of particular products. The Bord has a target for the establishment of three branded hotel groupings over the next two years. Brand marketing will be extended to other tourism products. (3.8)

Ch.5. Import Tourism

19.5 In order to encourage Irish people to holiday at home the question of Irish Holidays for our young population needs to be critically assessed. The Government have asked Bord Failte to do this (5.1)

Ch.6. Competitiveness

19.6 Sudden factors such as currency fluctuations can affect tourism in a very significant way. State agencies have to be able to respond quickly to any such changes. Bord Failte and other agencies concerned have been asked to introduce maximum flexibility into their marketing activities. (6.4)

Ch.7. The General Environment for Tourism

19.7 There has been a 50 per cent drop in the number of visitors by air from Britain between 1975 and 1983. The Government are examining what steps can be taken to increase the tourist traffic on air routes to and from the U.K. (7.7)

19.8 The average age of tourists has been increasing in recent years. The Government have asked Bord Failte to analyse this feature of our tourist traffic and to identify suitable strategies in marketing so as to adjust the age balance. (7.9)

19.9 So as to exploit the tourist potential of the Australian market the Government have requested the Minister for Communications to explore as a matter of urgency the possibility of extending favourable pricing arrangements for travellers already in Europe who wish to visit this country. The Government have also asked Bord Failte to intensify co-operation and joint marketing with British Tourist Authority in the Far East and Australian markets as a means of generating traffic for Ireland from these countries. (7.10)

19.10 Bord Failte’s future strategy for the home market will build on the present overall level of the home long holiday market and expand the short and off peak holiday segments through promotions build around activity and special interest holidays for our younger population. (7.11)

Ch.9. Environment

19.11 The Government will encourage the local authorities to pay particular attention to the need to make their areas more attractive and in doing so to draw on the assistance of local voluntary groups (9.4)

19.12 The Government have asked Bord Failte to embark on a more active approach in encouraging the development and presentation of the environment. This will include:

ithe identification of sites and sources of serious littering particularly abandoned vehicles,

iithe agreement of a pilot area with the City and County Managers’ Association which will be a model for a project on litter bin design, provision and servicing,

iiithe computerised mapping of the country’s physical attractions,

ivthe carrying out of a study of our national heritage of outstanding landscapes to identify those areas of tourist importance which may be under threat from development.

v.a review of recent reports on water pollution and the production of a policy document on the implications for tourism of trends in water quality.

vithe intensification of Bord Failte cooperations with planning authorities in the operation of the planning acts.

viithe intensification of Bord Failte cooperation with the Department of the Environment particularly in relation to the Environmental Awareness Bureau.

19.13 Bord Failte is extending the scope of its Community Projects Programme to include a series of awards of excellence for activities to improve the environment. These will be presented annually for local authorities under the following headings.

○National Tidy Districts Award

○Commercial Street Award

○Best Local Authority Housing Estate Award

○Tidy Beaches Award

○Recreation and Amenity Award

○Urban Area Development Award

Bord Failte will also present a new award for the best overall county performance in the Tidy Towns Competition. (9.6)

19.14 The Social Employment Scheme will be used to provide employment for the improvement of tourism amenities. (9.7)

19.15 The Environmental Awareness Bureau will examine with the Department of Education whether litter education could be incorporated as a permanent part of schools’ curricula. (9.8)

19.16 Measures to combat litter on beaches will be considered in the light of the Government’s decision to devolve the functions of the Minister for Communications in this area (9.9)

19.17 The Minister for the Environment is reviewing the provisions of the Local Government (Sanitary Services) Act 1948 in relation to caravan and camping sites with a view to extending licensing provisions to the whole country. Local authority and Bord Failte requirements for sites will be harmonised as far as possible throughout the country. (9.11)

19.18 Within budgetary constraints adequate resources will continue to be made available through the Sanitary Services Programme to local authorities to ensure that they can carry out the necessary works to control water pollution. (9.12)

19.19 Problems arising from marine wreckage will be examined by the Minister for Communications in consultation with the Inter Departmental Committee on Tourism proposed in Chapter 17. (9.14).

19.20 The Government have decided that the responsibilities of the Minister for Communications in relation to beach material under the Foreshore Act 1933 will be devolved to local authorities. (9.15)

19.21 The Department of Fisheries and Forestry will draw up a long term policy for the conservation of wetlands and peatlands. (9.16)

19.22 The Minister for Communications is sponsoring a comprehensive Sea Pollution Bill to combat pollution from ships and marine structures in Irish territorial waters. (9.17)

Ch.10. Internal Transport

19.23 Attention will be paid to road signposting arrangements to guide foreign tourists to and from tourist access points such as ferry ports and airports. (10.2)

19.24 The Department of the Environment will examine the cost implications of a phased programme of upgraded signposting on roads in areas of high tourist amenity. (10.3)

19.25 To encourage Irish coach tour operators to replace their fleet, to maintain standards and to extend employment the Government will consider any action which they might take to promote an increasing Irish participation in all niches of the coach tourism market. (10.5)

19.26 The Minister for Communication will draw up the necessary legislation to consolidate responsibility for the licensing of all passenger carrying boats to offshore islands. Measures will be introduced to curb and penalise unauthorised operators. (10.6)

Ch.11 Tourism Amenities and Facilities

19.27 The Government have asked Bord Failte to re-examine, as a priority, whether the present sports related products are best suited to the needs of younger tourists. The Government through COSPOIR and the sports organisations will encourage the development of sports facilities for both Irish and foreign tourists to the maximum extent possible. (11.2)

19.28 The Government have asked the Irish Goods Council to examine the shopping needs and habits of tourists so as to enhance the value of the VAT Rebate Scheme for tourists who export goods in their personal baggage. (11.4)

19.29 The Department of Fisheries and Forestry and the Office of Public Works will take financial responsibility for development of tourist facilities in National and Forest parks. Consultation between these bodies, COSPOIR and Bord Failte will continue so as to identify tourists’ needs in these parks. (11.5)

19.30 The Government will remove the legal restrictions on the extent of the work which the Office of Public Works may do in presenting national monuments to the public. (11.6)

19.31 The Government have asked Bord Failte to discuss with the owners of historic houses and gardens, open to the public, how best the Social Employment Scheme can assist their maintenance. (11.8)

19.32 Public amenities, sometimes provided at considerable cost, often lose their tourism value simply due to neglect. The Government are drawing the attention of local authorities to the need to maintain such facilities. (11.12)

19.33 In order to raise standards of hygiene the Minister for Health will ensure that Environmental Health Officers give greater priority to the enforcement of the hygiene regulations in relation to such premises. (11.13)

Ch.12. Accommodation

19.34 Bord Failte in consultation with the industry will introduce improvements to the hotel grading system in 1986. (12.3)

19.35 The possibilities of a wider range of farm related holidays will be explored by Bord Failte over the next few years. (12.5)

19.36 Local Authorities will reconsider the regulations for the siting and format of directional signposts and notices for tourist accommodation so as to have uniformity throughout the country. (12.6)

Ch.13. Investment in Tourism

19.37 The Government have decided that a further allocation of concessionary finance will be provided through the Industrial Credit Company for working capital requirements. (13.1)

19.38 The Government intend to provide that the National Development Corporation will be empowered to make investments in tourism projects. (13.1)

19.39 A Tourism Development Team will be established in Bord Failte. The primary role of the Team will be to act as a catalyst identifying tourism opportunities and matching suitable developers and investors to appropriate projects. (13.3)

Ch.14. Seasonality

19.40 Marketing resources will be concentrated on promoting the shoulder season and extending the peak season from a 2 month to a 3 month period (14.2)

19.41 The Minister for Industry, Trade, Commerce and Tourism has asked the travel industry to market a special package for the Spring 1986 shoulder season (14.3)

19.42 The Department of Education and the Department of Labour will examine the feasibility of rescheduling school and work holidays to encourage more flexibility in holiday-taking. (14.5)

Ch.15 Promotion and Marketing

19.43 Bord Failte will undertake an exercise to monitor the efficiency of its promotional effort in quantitative terms. The results will be included in future Bord Failte Annual Reports. (15.1)

19.44 A study is taking place to investigate how Ireland can best exploit the new technology being developed in the travel trade for information and reservations systems. (15.5)

Ch.16 Access Transport

19.45 The Minister for Communications will;

itake tourism interests into account in proposals for harbour authorities,

iimonitor the arrangements for passenger traffic to Ireland to ensure competition and the provision of economically self sustaining services.

iiisupport moves within the EEC and elsewhere for a more competitive aviation policy,

ivfacilitate, where possible, the development of an expanded programme of charter activity to Cork and Shannon from the UK and Continental Europe,

vpromote where appropriate access to Ireland for carriers from newly developing tourists sources,

viauthorise, where possible, the development of “feeder” air services from Dublin, Cork and Shannon Airports to Ireland’s regional airports.

Ch. 17 Institutional Arrangements

19.46 The Government have decided to seek the services of a consultant with international experience to examine the effectiveness of all directly tourist related public expenditure. (17.3)

19.47 The Minister for Industry, Trade, Commerce and Tourism will monitor the implementation of tourism policy and revise it as warranted. The Government have asked Bord Failte to undertake an analysis of its promotional expenditure with a view to identifying quantifiable objectives for such expenditure and means of measuring results. (17.4)

19.48 In the past Bord Failte has often made financial resources available to other State agencies for their tourism related projects. The Government have decided that Bord Failte will, in future, concentrate its resources on marketing and maintaining standards. It will limit its role to offering advice in areas which are the primary responsibility of other agencies. (17.6)

19.49 To ensure full co-operation of all Departments in tourism affairs the Government have decided to establish an inter Departmental Policy Co-Ordination Committee chaired by a senior official from the Department of Industry, Trade, Commerce and Tourism. (17.8)