Speech at the AGM Irish Tourist Industry Confederation

I am glad to hear you say that there is broad recognition in the industry of the commitment the Government to the tourism sector. As you all know too well, the country has endured an extraordinarily difficult time economically. Unemployment is high and job creation is the Government’s priority. Early on, we identified tourism as a sector with potential to grow and introduced a number of measures through the Jobs Initiative to exploit this potential.

The VAT rate for tourism has been reduced to 9%, there has been a reduction in employers’ PRSI, and an easing of the Universal Social Charge for seasonal workers. The visa waiver scheme for visitors from long-distance developing markets visitors was launched.

In the recent Budget, the Government has continued this policy of assisting the industry and we raised the VAT threshold for SMEs, the Employment Investment Incentive Scheme was extended to include tourism accommodation and a fuel rebate for coaches will be introduced in July.

I believe that combined with the annual investment in the sector through the tourism agencies, these measures have had a very positive effect and tourism employment figures have outperformed other sectors.

In relation to the VAT rate of 9%, I want that continued through 2014 and beyond. But I need your help to make that case.

As you know, the VAT reduction costs the Exchequer €350 million a year. That’s a lot of money. So to help me with that case, what I don’t need is special pleading about how the industry is struggling. Every industry is struggling. What I need from you is evidence that this policy has worked, and is continuing to work.

Tourism Policy Review
I know of your keen interest in getting a tourism policy review started and I understand the sense of urgency you feel about the process. I can assure you that I agree that the timing is right to commence review, given the many challenges facing the tourism sector at present and the time elapsed since the publication of the “New Horizons” tourism strategy and the last review of this strategy by the Tourism Renewal Group.

I believe that, if the outcome is to have a real impact, we must secure the support of stakeholders both inside and outside the tourism industry, in Government and elsewhere, not only for the policy recommendations but also for their ongoing implementation. Doing so will require giving those stakeholders an opportunity to engage meaningfully with the review. I believe that this is the best way to ensure a robust, well-founded, workable outcome that will make a real difference to the long-term competitiveness and strength of the Irish tourism sector.

For this reason, I am considering a multi-stage approach to the review, in which I would first outline my overall approach in a draft statement later this year, followed by a consultation process, before finalising the policy. Once this policy has been set, it should provide a robust foundation for a broader tourism strategy and action plan reflecting these policy priorities and the views of key stakeholders and consumers. I welcome ITIC’s interest in the review and look forward to working with you over the course of the review process.

Tourism Performance
The overseas visitor figures for 2012 although modest in numbers growth were positive on the most important measure, tourism revenue. This is largely due to the fact that visits from the higher-spending Mainland European, North American and long-haul markets all registered growth. There was a strong increase in the number of holidaymakers and business people travelling to Ireland. For holidaymakers specifically, expenditure increased by 10% from North America and by 11% from other long-haul areas.

We are continuing to market strongly to potential holidaymakers from these areas, given that they tend to stay longer and spend more than visitors from closer to home. The Government has worked hard to build on this segment with measures like the Visa Waiver Programme and by attracting new air routes into Ireland, particularly from the US. In relation to the Waiver scheme, informal estimates indicate a rise of about 21% in arrivals from visa waiver countries, comparing the 12 months before the visa waiver was introduced to the 12 months since.

I am confident that we can encourage further growth from these longer-haul markets in this Gathering year. The latest overseas visitor figures from the CSO show the positive start to the year of the Gathering is being sustained. I am particularly pleased with the strong numbers from North America, Australia and New Zealand. These are key markets for the Gathering which clearly is already playing its part for tourism. Indeed if the current trend continues, there is every chance that 2013 will be a great year for visits from North America.

There’s no getting away from the fact that Britain continues to be challenging but I believe the industry and the tourism agencies can use the fantastic line-up of events in The Gathering to make the most of the opportunities for Ireland in that market, as was highlighted in the recommendations of the Tourism Recovery Taskforce. But it is important to put it in perspective. Official data shows each trip from Britain generates less than €300 here, while a visit from North America generates over twice that at €729 and trips from Australia generate €858.

Overseas Marketing
In terms of our general overseas marketing activity, I have allocated over €37 million this year for overseas tourism marketing which allows Tourism Ireland to fully implement its marketing plans. We can never be complacent in terms of assuming that visitors will just arrive in Ireland because of the excellent tourism product we have to offer. We need to continue to evolve and refine our message and ensure that we are targeting the right people.

That is why I welcomed the report of the Tourism Recovery Taskforce, entitled “GB Path to Growth”, and its recommendations for restoring growth from Britain which are reflected in the 2013 plans of the tourism agencies. Similarly with regard to North America, Tourism Ireland is now rolling out its three-year plan, Make Ireland Jump Out, focusing on new segments, shorter-stay and shoulder-season travel. The plan aims to see the number of American visitors increase by +20% between 2013 and 2015.

Dealing with our significant European markets, I am pleased that this year that the Tourism Ireland and industry partners, will revisit the relatively-recently-completed reviews of the German and French markets to update them both with more recent data and research and ensure they are still fit for purpose. I know that ITIC members will be involved in this process and I look forward to seeing the fruits of the work.

The Gathering
Turning to the Gathering, we are delighted that people at home and throughout the world have responded so positively. At last count, we have approximately 3,300 individual Gatherings confirmed including clan gatherings, festivals, special sporting events and concerts taking place all across the country throughout the year. Along with well-established events, we are also supporting a specially targeted set of events for the Gathering. We can see already how the very successful New Year’s Eve Event in Dublin alone had 43,000 attendees with one-third of those from outside Ireland and the People’s Parade in this year’s St Patrick’s Festival had almost 6,000 people from overseas joining the parade.

I have stated previously that while we have very much targeted this year, I have no doubt that the pay-off for participation will have longer term positive consequences. The many events which are offering unique and engaging experiences to visitors, may develop into annual traditions or create on-going connections with other parts of the world. More importantly, the connections we strengthen and build, at home and abroad, will I believe be the most important legacy of The Gathering Ireland 2013.

A crucial part of this is the industry making sure that visitors’ experiences are positive and that we avoid any allegations of over-pricing or bad value. If people have a good experience, they are more likely to come back. And that’s the best way to increase revenue. I need the industry to be mindful of this and to continue their efforts to make The Gathering a success and to stay actively involved in organising, supporting and promoting events.

Product Investment
Finally, I note Mr. Chairman what you have said about the continuing need for investment in tourism product. As a result of Fáilte Ireland investment, we have a number of large investments coming on stream over the course of the year such as the Waterford Viking Triangle and Kings John’s Castle and some other big projects in development, not least the Wild Atlantic Way and the Dubline. In order to continue to keep Irish tourism product attractive to overseas visitors, I will strongly be making the case for significant tourism capital investment in the post 2016 capital envelope.

Conclusion
In conclusion, I have enjoyed working with you over the past two years. I will continue to work co-operatively with you as we manage our way through these difficult times.