Making the most of a growing business

Tourism has grown to become a mainstay of our economy, writes KEVIN MILLS.

TOURISM is worth €4 billion to the Irish economy and employs more than 150,000 people.

These figures highlight the importance of the industry, according to Irish Hotels Federation chairman, Richard Bourke.

“In the hotel sector, we generate €2bn in sales nationally, and we put 87% back into the economy in wages, food, beverage, guest supplies, professional fees, and local Government and bank charges,” he said.

For every 10 jobs the hotel industry creates, it creates five jobs in supplier and support companies, he said.

“We in the hotel and guesthouse sector, not including B&Bs, have invested €6.6bn in our properties at today’s prices. In Cork city, there is almost half-a-billion invested in hotel rooms and ancillary services.”

Tourism is Ireland’s largest, most regionally spread, indigenous industry. In the 1950s, 1960s and 1970s, tourism supported agricultural earnings in many communities. Today, tourism is the mainstay of these communities with a declining agricultural sector providing the supplementary income.

Tourism in Dublin, including day visits, is worth €2bn; in Galway, €570m; and in Cork, €320m.

Mr Bourke said hotel development in Ireland has been phenomenal over the past eight years with hotel room stock in the country almost doubling from 24,000 rooms to 45,000 rooms. By 2007, hotel stock in Dublin will have trebled since 1996.

“A lot of this development is tax-incentive driven and I think you will see a halt when the tax break runs out mid-2006,” he said.

“We feel we have enough development - some would say too much - particularly with national occupancy rates running at 60% for the country in 2003/2004,” he said.

“However, if certain promises are kept and the population continues to grow as suggested it will work,” he said.

The promises include:

Dismantling the bilateral air agreement on the Atlantic, allowing flights to the US from Cork;

The provision of a National Conference Centre;

The provision of a second fast turnaround competing terminal at Dublin Airport;

The improvement of road and transport infrastructure.

“We must have good infrastructure and ease of access to get the regional spread we need,” Mr Bourke said.

“When we look at the regulatory environment and the cost of doing business, we find that in relation to EU regulation in areas such as employment health and safety and risk, we are always first-up, best-dressed amongst our EU competitors.

“This all comes at a cost, which has an effect on our competitiveness. We have the highest minimum wage in the EU more than double the minimum wage in Spain. This is a competitiveness issue.”

Mr Bourke is also critical of commercial rates and the unfair strain he says they put on Irish business.

“Because of the shambles of the funding of local authorities and the fact that it is based on property, rather than ability to pay, the hotel sector is treated inequitably.

“Cork Chamber as an organisation has always been supportive of tourism and has been involved in many initiatives to generate business for the city, including the recent visit to Chicago. I applaud that support and say: ‘a lot done - more to do’.

“People involved in tourism in Cork and those in the hotel and guesthouse sector, led by my colleague John Gately, are putting a significant effort into the city’s marketing vehicle ‘Cork Uncorked’ and using its year as European Capital of Culture, as a platform to develop Cork city’s tourism.” He asked what the wider business community was doing to support tourism in Cork city.

“How much of your income is either directly or indirectly derived from the tourism industry? Could part of the reason that Cork city is lagging behind be that it does not have the support it deserves from the wider business community?”

Business tourism in this country is worth €250m, with 150,000 people coming to Ireland for conferences and meetings.

“We are punching below our weight in this sector. It is expected that the National Conference Centre, for which tenders have to be in by early March, will generate €60m worth of revenue to the economy, excluding pre and post conference trips.

“Think what a conference centre could do for Cork. Perhaps the establishment of a conference centre for Cork should be driven by the local authorities in cooperation and partnership with the business community, perhaps the chamber has role to play in this.

“I am constantly asking for tourism sector interests to work together. Perhaps in Cork there is a role for the Chamber to bring them together in a very business-focused tourism committee.

“I noticed another committee has sprung up for the Capital of Culture 2005 - is this because another committee is needed or existing structures are not inclusive and transparent enough?

“The country is watching how Cork will perform next year. This is a heaven-sent opportunity to showcase this wonderful city and let the whole country and the international tourism community know what a jewel you have here - the rivers, the hills, the harbour, the architecture, the renewed streets, the history, the culture, the character of the place. Nobody knows about it but they know about Galway and Kilkenny.

“Cork is not getting its fair share. 2005 is the opportunity to change that for the future, that is the challenge. So get the energy that I know is in this wonderful city focused, work together as a business community for tourism - it is in all your interest. Tourism is now big business,” he said.