Check Against Delivery
Introduction
I am delighted to be here to officially open the 4th Irish Hotel Investment conference. I would like to thank the IHF for inviting me here today to make this address. Your President, Joe Dolan, Chief Executive, Tim Fenn and all those involved in organising today’s event, have put together an impressive panel of expert speakers to provide you with valuable and thought-provoking topics for consideration throughout the day.
Tourism is one of Ireland’s most important economic sectors and has a significant potential to play a further role in Ireland’s economic renewal. I must acknowledge the commitment of all stakeholders - industry, Government and the tourism agencies - to helping maintain our competitive position, meet growing consumer demand and stand out in a crowded international marketplace.
Before today's sessions begin, when you will consider investment opportunities for the hotel sector, I would like to take a moment to outline Government support for the tourism and hospitality industry and to reference encouraging tourism trends and targets.
Tourism Industry Performance
The tourism industry generally - including the hotel sector - is vital not only for our overall economy, but also for balanced regional development and sustainable growth. This industry creates jobs and generates earning in communities throughout Ireland, particularly rural areas.
This country is continuing to improve our tourism offering and we are ideally placed to become even more attractive for holiday-makers from home and abroad. We have many advantages. We have stunning scenery, bustling cities and towns and a warm welcome throughout. The number of quality tourist attractions and the range of exciting festivals and events around the country have all grown and improved over the last number of years. Of course, the high quality and service of our tourism accommodation is essential to serving and supporting this offering.
Since 2011, we have witnessed continued growth with official CSO figures on overseas travel showing a new record high of over 8.6 million visits to Ireland during 2015. More importantly, the total associated revenue from these overseas visitors (excluding carrier receipts) amounted to over €4.2 billion last year – an increase of over 18 % on 2014. When we combine overseas visitors’ spending with domestic tourism expenditure, our tourist industry was worth over €5.7 billion to the economy last year.
Last year's strong performance has continued into the early months of 2016. The latest CSO data on overseas travel, covering the period February - April 2016, reported an increase of 16% in overseas visits to Ireland compared to the same period in 2015. I understand that the mood is high and expectations for the 2016 season are very upbeat, with good growth projected across all segments of the industry.
Government Support for the Tourism Sector
This continued growth since 2011 reflects the expertise and qualities of the people managing and working in our tourism industry. However, it is also clear that policy decisions made by Government in recent years have also helped turn our performance around.
The VAT cut proved to be a successful measure for supporting competitiveness. This combined with the reducing the Air Travel Tax to zero and changes to the Visa regime demonstrated steadfast support for this key economic sector. Combined with sustained annual investment in the sector through the tourism agencies, these measures have had a very positive effect and tourism and hospitality employment has significantly outshone other sectors.
Let me assure you that the Government is committed to supporting the tourism and hospitality industry, as evidenced in our comprehensive Programme for Government. As we embark upon our term in Government, we recognise that the outstanding recent performance does not mean that we can divert our focus away from the tourism sector. My Department and the tourism agencies will be doing our best to add value to our tourism product. We will further develop the experience brands, Wild Atlantic Way, Ireland's Ancient East and Dublin - A Breath of Fresh Air; build on our encouraging recent performance; and win as much sustainable tourism business for Ireland as possible.
Good Conditions for Investment
I understand that market conditions influencing hotel investment considerations are finally improving. Indeed, I would take the strong representation by banks and other finance providers at today's conference as evidence of their recognition of the potential that exists in the sector. I know that today's expert speakers and the topics they will cover will give you valuable insights into matters such as market trends, feasibility, funding considerations, banking solutions and general availability of finance.
Clearly, the tourism industry generally - including the hotel sector - has experienced a remarkable turnaround of fortunes since 2008. Our improved tourism performance means demand is increasing for tourist accommodation, with surveys showing that, although some regions are performing better than others, the recovery is continuing across the country. With specific regard to the hotel sector, analysis of available statistics shows continued annual increases over the past number of years in key performance indicators such as room occupancy, rates, revenue and profits.
Fitzpatrick Associates' Dublin Accommodation Study for Fáilte Ireland
Furthermore, analysis of recent trends in occupancy levels and the impact of increasing demand indicate that we will require additional capacity - in particular Dublin City Centre - and will therefore need investment to increase our accommodation stock.
I was pleased to welcome yesterday's publication of the independent report "Analysis of Visitor Accommodation in Dublin 2015-20", conducted by Fitzpatrick Associates on behalf of Fáilte Ireland. While the report's findings suggest the accommodation capacity pressures in our capital may ease from 2019 on, it is clear we face challenges in the intervening period.
In that period, it is vitally important that we keep the focus on value and competitiveness. To do otherwise would seriously jeopardise continued growth. If we are to enjoy sustained growth in tourism nationally, I believe it is incumbent on all tourism stakeholders to help create the right environment for the tourism sector to expand and meet the inevitable growth in demand for accommodation.
With specific regard to factors within my Department's and Fáilte Ireland's remit, I was happy to approve revised hotel Regulations, which are due to come into force later this year. The changes should make investment even more attractive by allowing hotel operators provide more rooms and operate at a lower cost base, therefore improving hotel capacity, competitiveness and profitability.
Conclusion
We all agree that the tourism industry makes a vital contribution to our economy and to jobs all around the country. The turnaround in tourism performance and the continued commitment of Government and the tourism agencies to supporting and further developing the sector, have created excellent investment opportunities with good returns for investors ready to capitalise on this momentum.
Following yesterday's publication of the Fitzpatrick report into visitor accommodation in Dublin and the revised hotel Regulations due to come into force later this year, we must all take the steps necessary to pave the way for additional capacity. It is now over to you and other potential investors to consider how to make the most of opportunities arising.
I hope you all will have a very informative and productive experience at today’s conference and I wish you all every success in your business in the future.
Thank you.