According to preliminary
estimates 5.8 million visitors came to Ireland in 2001, a reduction of 7% on
the previous y e a r. D o m e s t i c m a r k e t indications are that home
holidays increased by 12% to 3.6 million. While revenue estimates are still
unavailable it would be reasonable to expect that this level of activity together
with the receipts of Irish carriers will total approximately €4.9 billion.
Using an established economic model this should have netted €2.25 billion
in taxation revenue to the Irish Exchequer. There are now 46,000 hotel and guesthouse
bedrooms in Ireland an increase of 1% on 2000 and employment in the sector is
estimated at 57,000.
The unprecedented coincidence
of the impact of the foot and mouth crisis during the key booking season, the
slowdown in global economic activity and the impact of the terrorist attacks
in the US resulted in a major reduction in visitor numbers especially from North
America. It is estimated that the number of North American arrivals in Ireland
during 2001 has fallen by 14% to 915,000. British arrivals have fallen by 5%
to 3.3 million and mainland Europe arrivals by 7% to 1.35 million. The performance
of the industry, following the foot & mouth crisis, would have been much
worse but for the reassurance campaigns made possible by the additional allocation
of €9 million by the Government. A comparison of the 2001 preliminary estimates
and tourism growth targets, set as part of the National Development Plan, show
a loss in revenue of up to €317 million and a reduction in visitor numbers
of 770,000.
The loss of air routes
and the curtailment of services by Aer Lingus, Delta and British Airways will
make the recovery process more difficult. The most serious contraction is expected
to be in transatlantic services and appears to be disproportionately affecting
access through Shannon and Cork. The anticipated reduction in the number of
North American visitors, with their propensity to use hotels, is of particular
concern as we face into 2002.
MEMBERSHIP
The Irish Hotels Federation
now has 935 members made up of 640 hotels and 295 guesthouses.
“BLUEPRINT FOR
THE FUTURE”
A strategic review and
recommendations for the Irish hotel and guesthouse industry.
Click here to view key points.
The strategic review, carried
out by CHL Consulting Co. Ltd. in conjunction with Accênture, GHH Consult
and Peter Bacon & Associates was published last February. The vision statement
that shaped the strategy defined the industry goal “to create a profitable,
internationally competitive industry, delivering an excellent product and outstanding
service”.
From the outset an important
part of the review was the participation of members in the consultative process.
A second round of IHF branch workshops took place during June and July. The
findings of these workshops and amendments to the proposed recommendations were
presented to Council in September.
The foot and mouth crisis
and the aftermath of 11 September atrocities resulted in a shift in emphasis
of the activities of the Federation. The priority of the executive was to focus
on the reassurance campaigns and activities that held out the best prospects
for tourism recovery. Consequently there was less than the desired emphasis
on some of the recommendations of ‘Blueprint for the Future’. Nevertheless
the recommendations, amended on foot of the consultations at branch level and
the views of the National Council are set out in a separate section of this
report.
The finance / tax recommendations
were to a large extent incorporated into the pre-budget submission and will
also be included in the fiscal demands of future lobbying.
Under the marketing and
branding section many of the recommendations have been implemented under the
‘irelandhotels.com’ initiative. The remaining items will become part
of the marketing committee’s agenda in 2002. Training has been provided
for at a series of technology seminars, with supplementary one to one training
available by phone. The development of a property management service as part
of ‘irelandhotels.com’ means that a substantial number of the recommendations
in the review under this heading are being met. Progress is also being made
on having Showtel maintained in a virtual form on the IHF website (www.ihf.ie)
and arrangements are in place to make e-commerce advice readily available to
members.
A substantial number of
the recommendations under the product development heading are being met by the
incorporation of environmental protection measures into IHF policy and the promotion
of training and international benchmarking by CERT.
Arising from the recommendation
on management development a pilot ‘mentoring programme’ will be introduced
for management graduates. If successful it will be to extended to most management
graduates over the next two years. Representation is being made to hotel management
schools to include waste management and energy efficiency in the curriculum
and an action plan is currently under development by the employment committee
to implement the other recommendations under the management and human resources
section of ‘Blueprint for the Future’.
The document also recommended
that a comprehensive review should take place of the classification system and
that the presentation in the various categories should be revised to elaborate
from lower to higher grades to emphasise the positive benefits of each grade.
It is also recommended that premises should obtain the classification sought
as long as a high percentage of the requirements for that level are achieved.
These issues will be raised in discussions with Bord Fáilte and the contracted
classification company Excellence in Tourism Limited during 2002.
The recommendations in
the area of classification were the subject of much discussion and debate, it
was finally agreed that two categories of registered property should be sought
– hotels and the existing guesthouse category. More work is necessary to
develop a title, which adequately conveys the identity of the later category.
It is the intention to seek a revision of the regulation requiring hotels to
serve all comers, with the format of breakfast and the evening meal served at
the discretion of the proprietor. These objectives will be promoted in an upcoming
review of the registration regulations.
FOOT AND MOUTH CRISIS
As the AGM in Kilkenny
was coming to a close news was emerging of a suspected outbreak of foot and
mouth in Meigh, Co. Armagh. Members were immediately informed of the necessary
precautions and preventative measures to restrict the spread of the disease.
We commenced a campaign
to highlight the plight of hotels and guesthouses and attempted to quantify
the financial impact of the crisis. In the first week alone we estimated that
over €50 million worth of business had been cancelled or deferred. Our
President addressed the Joint Committee on Tourism, Sport and Recreation on
the impact to the sector. I participated in the activities of the Tourism Task
Force, which initially met twice weekly and later weekly.
The Federation also participated
in lobbying the Department of Tourism, Sport and Recreation, while also supporting
them in their efforts to fine-tune the restrictions that were in place. This
facilitated the re-commencement of activities that had a low risk of spreading
foot and mouth disease. The Federation led the call for the creation of a special
promotion fund to launch an early reassurance campaign to redress the damage
that bad publicity surrounding the outbreak had inflicted on Ireland. The Government
provided an extra €9 million to augment marketing activities at home and
abroad.
Gerry O’Connor, past
President of the Federation, accompanied the Minister for Tourism, Sport and
Recreation on a reassurance visit to the US and our President led a number of
hoteliers on a special trade delegation also to the US. The initiatives in America
involved meeting with travel agents and trade associations in Boston, Chicago,
New York, Washington and Los Angeles. We also actively participated in the reassurance
campaign in Britain.
As part of the Tourism
Action Group we were in a position to influence the formats and methods used
in the reassurance campaigns. Throughout the summer we consistently encouraged
our members to remain vigilant by keeping the prevention methods in place. We
continued to make representations on behalf of our members who were experiencing
difficulties, particularly in areas that required rulings and guidance from
the special expert group set up by the Minister for Agriculture, Food and Rural
Development. It is estimated that the foot and mouth crisis cost the tourist
industry over €320 million in lost revenue. The President and Executive
of the Federation had meetings with the banks, discussions with officials of
the Department of Tourism, Sport and Recreation and Revenue Commissioners to
ensure that they understood the plight of hoteliers who were suffering enormously
as a result of the foot and mouth crisis. Guidance documents were issued to
help members deal with the challenges that they faced.
IMPACT OF 11 SEPTEMBER
2001
The atrocities in New York
and Washington on 11 September had an immediate and drastic impact on the tourist
business. Our first action was to contact our members by email, asking them
to be supportive of any Americans staying in their properties and to facilitate
them if necessary to make alternative travel arrangements.
We lobbied the Government
and Bord Fáilte to find additional funding for a promotional campaign
in Britain and to support the various initiatives announced by carriers on the
transatlantic routes. We expressed particular concern at the curtailment of
air services particularly the Aer Lingus’ services from Baltimore, Newark
and Stockholm, Delta’s service from New York and BA’s services from
London to Shannon and Cork. We identified that the domestic, British and mainland
European markets as the best prospects for tourism growth for the 2002 season.
We supported the call for the creation of effective incentives to procure additional
low fare access between Ireland and continental Europe.
We made provision on ‘irelandhotels.com’
to enable members to promote special offers. We co-operated with Tourism Ireland
in New York by asking our members to support journalist and travel trade familiarisation
trips.
Following the atrocities
we circulated guidance memorandum on dealing with cancellations and on handling
the business challenges particularly those of a financial nature facing many
members. We discussed and obtained assurances from the principal lenders to
the sector that they would continue to support the industry through this difficult
period.
Through our involvement
with the Irish Tourist Industry Confederation we engaged in the development
of a recovery plan for Irish tourism which has been submitted to the Government
and will become a lobbying document in the run up to the general election.
TOURISM IRELAND LIMITED
Tourism Ireland Limited
has now assumed the overseas marketing roles for the island, previously carried
out by Bord Fáilte and the Northern Ireland Tourist Board. I am privileged
to be a Director of Tourism Ireland and throughout 2001 the focus of the company
was the establishment of structure and organisation, as well as drawing up a
marketing programme for implementation in our main overseas markets for 2002.
The marketing programmes
were drawn up in conjunction with the two tourist boards and the industry north
and south. It also involved the development of new Tourism Brand Ireland advertisements
to be used in the campaigns. The impact of the downturn in the global economy
and the events of 11 September, were taken into account to develop a suitable
promotional programme that could be appropriately responsive and flexible to
market needs. The delivery of this programme will place particular emphasis
on tactical marketing and cooperative initiatives between product providers
and carriers. The brand presence will be maintained in all the key markets as
the new marketing communication suites developed as part of Tourism Brand Ireland
roll out.
An all island tourism marketing
structure has been put in place with representatives from Tourism Ireland Limited,
Bord Fáilte, Northern Ireland Tourist Board and industry representatives.
I am a member of the Tourism Marketing Partnership (TMP) committee that has
also been involved in the consultations to evolve and develop the marketing
strategy for 2002. Prior to the setting up of Tourism Ireland Limited a Tourism
Marketing Partnership existed that had a similar relationship with Bord Fáilte.
However the need for emergency action in the wake of the foot and mouth crisis
meant that the activities of this partnership were to a large extent taken over
by the Tourism Action Group on which I also represented the Federation. The
2002 marketing budget for Tourism Ireland Limited is €28 million. In addition
TMP will also carry out promotional activity on behalf of Bord Fáilte
and the Northern Ireland Tourist Board in areas of product and regional marketing,
with both tourist boards providing additional funding for these purposes. The
marketing budget is allocated as follows:
| Britain | €7.6 million |
| North America | €7.2 million |
| Continental Europe | €9.5 million |
Approximately
half of this amount is being spent on advertising activities in these markets.
BORD FÁILTE
Throughout the year we
had many meetings with Bord Fáilte to address the issues facing the industry.
Special emphasis was placed on the difficulties encountered by the industry
throughout 2001 when activity products, escorted coach tours, areas depending
on tourist attractions and smaller enterprises were particularly affected. Many
of our members depend on these sectors and our meetings contributed to implementing
actions to redress these difficulties.
Bord Fáilte’s
primary role will now be directed towards the domestic market north and south,
niche product market promotion (the overseas activity will be carried out by
Tourism Ireland Limited) and the handling of media visits. In the product development
area its role will include the registration and classification functions, which
have been contracted out to Excellence in Tourism Limited, sports tourism promotion,
festivals and cultural events, the provision of information and research and
the co-ordination of the marketing activities of the Regional Tourism Authorities.
A total budget of €29.1
million has been allocated to these areas for 2002 and will be utilised as follows:
| Sports Tourism Promotion | €7.6 million |
| Festivals & Cultural Events | €6.4 million |
| Product Marketing | €4.1 million |
| Regional Marketing Initiatives | €3.1 million |
In addition a €2.1
million advertising and promotion initiative will allow industry participation
north and south. The balance of the budget will be expended on enquiry servicing,
media visits and research promotion.
Niche product marketing
is a recognised producer of business. It is estimated the 2.5 million visitors
in this category came to Ireland in 2001, almost 1 million of whom were specialists.
Bord Fáilte retains the function of niche product marketing within its
revised remit. The objective for 2002 is to retain the 2000 level of business
and the trade infrastructure, to provide platforms for the industry to promote
niche products and to support co-operative marketing. The marketing budget for
this area for the year is €3.4 million.
Bord Fáilte will
implement and operate the Tourism Product Development Scheme under the National
Development Plan 2000 – 2006. This scheme will involve an EU co-financed
public investment package of €130 million over the next 5 years. A number
of specific measures have been identified for funding including the development
of major day visitor attractions, special interest pursuits including water
based activities and health tourism and the promotion of the better management
of the relationship between tourism and the environment.
CONVENTION BUREAU OF
IRELAND
The Irish Hotels Federation
has four representatives on the council of the Convention Bureau of Ireland
– Niall Geoghegan, Paul McCracken, Patrick O’Donoghue and myself.
The function of the council is to advise and guide Bord Fáilte in undertaking,
marketing campaigns aimed at attracting prominent overseas businesses and sectors
for conferences and corporate meetings.
Thanks to additional funding
received in the 2001 budget, approximately €1.8 million was expended in
marketing and promotional activities for conferences and incentives. A major
initiative during the year was the commissioning of outside consultants to source
leads for international associations’ conferences and corporate meeting
business. This commissioning also involved the research and development of the
‘Conference Ambassador Programme’ and measurement criteria were implemented
to determine the success of its’ activities. The consultants worked closely
with Bord Fáilte conference executives in Dublin and London, and dovetailed
their activities where appropriate. Their contract has been renewed for 2002
when the real benefits of their efforts over the last year will begin to come
to fruition.
A new conference planner
website has been developed. Over 100 meeting incentive buyers, from 15 markets,
attended a ‘Meeting of Mind and Spirit’ promotional workshop in October.
Over 100 Irish trade delegates also attended the event. As in previous years
Ireland was represented at the EIBTM in Geneva, IT&ME in Chicago, the Jahrmarkt
in Germany and CONFEX in London.
A new conference and meeting
guide is expected in January 2002 and a conference advisory manual will be compiled
for prospective conference organisers and ambassadors. The saga of the National
Conference Centre continues. During the year Bord Fáilte on behalf of
the Minister for Tourism, Sport and Recreation commissioned a report from an
international firm of consultants. The findings of this report have yet to be
made public but there is reason to believe that its recommendations include
the provision of an international conference centre in Dublin and the establishment
of an effective focussed conference marketing function.
‘BE OUR GUEST’
‘Be Our Guest’
continues to be the most effective marketing tool of the Irish Hotels Federation.
During the year 370,000 copies were printed and circulated at home and abroad.
As usual the 2002 guide was published in November ahead of the World Travel
Market. It has 1,050 entries, 60 from Northern Ireland.
As in previous years ‘Be
Our Guest’ was promoted and distributed at consumer fairs in Dublin, Cork,
Belfast, London, Manchester, Birmingham, Glasgow, Oslo, Stuttgart, Munich, Amsterdam,
Helsinki, Brussels and Gothenburg. The offices of Tourism Ireland Limited will
continue to distribute the ‘Be Our Guest’ Guide as Bord Fáilte
have heretofore.
‘IRELANDHOTELS.COM’
2001 saw the formal launch
of ‘irelandhotels.com’. The site featuring all the entrants in ‘Be
Our Guest’ was simultaneously updated on the launch of the 2002 guide.
Entrants to the guide are now afforded the opportunity to promote their special
offers and sell gift vouchers online. In addition to developing links with other
websites the Council of the Federation has approved a substantial allocation
of funds to promote awareness of ‘irelandhotels.com’.
During November 2001 we
participated in press advertising in Britain in conjunction with Bord Fáilte.
This promotion resulted in a substantial increase in the number of visits to
the site. Some of the continuing advertising activities will dovetail with the
activities of Tourism Ireland Limited and Bord Fáilte, and we will track
the effectiveness of this promotional activity.
Visits to ‘irelandhotels.com’
are now running at over 8,000 per week, with the average length of visit being
about 15 minutes.
A major part of the development
of ‘irelandhotels.com’ was entering into an arrangement with SynXis
International to provide an online reservation facility which also enables all
the featured properties to obtain bookings through Global and Internet Distribution
Systems without substantial up front costs. As far as we are aware the Federation
is the only national association in the world that has an online reservations
system in place for the promotion of its members properties.
The operation of ‘irelandhotels.com’
and its facilities will be kept under constant review to ensure that they are
up to date and sensitive to the fast changing market environment.
EMPLOYMENT SERVICES
The employment services
division of the Irish Hotels Federation had a very active year. In addition
to launching a new advisory booklet and CD-ROM on the Quality Employer Programme,
priority was given to supporting members in maintaining the industry as a quality
employer.
20,000 copies of ‘Get
a life in Tourism’ magazine were published and circulated in September.
It is now the leading publication on hospitality careers for guidance councillors
and school leavers.
The placement division
continues to be active and a new brochure was launched to assist in its overseas
activities. During 2001 the division assisted in placing about 200 employees
with Quality Employer accredited properties.
As in previous years the
Federation actively participated in the FÁS Opportunities 2001, Return
to Work Recruitment event and the Irish Times Higher Options conference as well
as participating in the National Careers Roadshow. These activities will continue
into 2002 and a more detailed report on the activities of the employment division
is contained in a separate section of the annual report.
HOTELS JOINT LABOUR
COMMITTEE
It was a difficult year
in negotiation within the Hotels Joint Labour Committee. It was agreed to implement
a 2% adjustment to the ‘Programme for Prosperity and Fairness’. The
Labour Inspectorate sought clarification from the Joint Labour Committee on
the calculation of the Sunday premium payable under the Organisation of Working
Time Act 1997 to employees rostered to work less than the 78 hour fortnight.
The Joint Labour Committee decided to recommend that parttime employees should
be paid double time for working on a Sunday. The Irish Hotels Federation and
IBEC representatives on the Joint Labour Committee vehemently disagreed with
this decision. Members were informed of the circumstances that led to the arrival
at this decision. We outlined the procedures open to seek a reversal of the
decision. In excess of 150 members made submissions to the Hotels JLC. They
outlined the effect that the ruling would have on them and requested that the
JLC reconsider and put in place a system whereby parttime employees would be
paid a premium for working on Sundays, relative to the number of hours they
worked. The Federation obtained legal advice that stated this format would adhere
to the requirements set out in the Organisation of Working Time Act 1997. Following
the Joint Labour Committees confirmation of their original decision the Federation
felt it had no option but to petition the Labour Court to reject the JLC’s
recommendation. A hearing of the Labour Court into this position took place
in October 2001 and its ruling, issued 1 February 2002, rejected the Employment
Regulation Order as proposed by the Hotels JLC. This does not relieve us of
the obligation to pay a premium for work performed on a Sunday. We are still
advising members that an employee required to work every Sunday should receive
a premium of 20% of their total weekly wage and 10% if required to work every
second Sunday.
Following pressure from
the SIPTU representatives on the JLC the issue of a mandatory pension and sick
pay scheme for hotel employees was considered at two JLC meetings. A bi-lateral
meeting with SIPTU took place and a JLC meeting is scheduled for March 2002
to discuss this issue. The Council of the Federation has been kept fully appraised
of these developments. There is serious concern over escalating labour costs,
and the difficulties in trading circumstances have frequently been brought to
the attention of the JLC committee.
Peter McDermott is now
Chairman of the JLC having succeeded Billy O’Carroll on his retirement.
The employers representatives on the current Hotels JLC committee are, in addition
to the Chief Executive of the Federation, Eimear D’Arcy representing IBEC,
Peter McDermott, Anne O’Carroll, Lee Kidney, Frank Timmins and Sean Dempsey.
EQUAL STATUS ACT 2000
Recent rulings made by
Equality Officers under the Equal Status Act 2000 are a cause of concern amongst
members.
These concerns are based
on the difficulties experienced when taking appropriate action to run a professional
business for the enjoyment of orderly well-behaved clients. Members who have
refused to serve particular customers have been faced with subsequent action
being taken by those refused.
The situation has been
further exacerbated by the recent ruling of an Equality Officer that having
a blanket ban on under 18 year olds being on a premises with their parents is
a discriminatory policy against parents of under 18 year olds on the family
status grounds under the Equal Status Act 2000. Normal good practice in hotels
and guesthouses where children have been controlled in bars, lounges, swimming
pools etc. would now appear to be a discriminatory action subject to compensation
claims.
There is also increasing
concern over the practice of parking caravans, without permission on the private
property of hotels and compensation then being sought to obtain removal. We
believe that this practice is extortionate and that the legislators in this
country have got to outlaw it in the interests of protecting the rights of private
property holders as guaranteed under the constitution.
Meetings have taken place
with the Minister for Justice, Equality and Law Reform and his officials to
reiterate and expand on these concerns. The Vintners Federation of Ireland and
the Licensed Vintners Association who are equally concerned have joined us in
these meetings. Our efforts at lobbying on this matter will continue and will
be heightened in the run up to the general election.
LIQUOR LICENSING
The Federation made a submission
to the Commission on Liquor Licensing on areas that we believe should be addressed
in a review of the Liquor Licensing Laws.
While the Intoxicating
Liquor Act 2000 addressed many areas that required immediate attention, such
as an updating of the permitted opening hours, providing for the upgrading and
transfer of certain licenses, the sale of beer in restaurants and the clarification
of activities of clubs. The Act also strengthened the laws for dealing with
underage drinking. There are however other issues that need to be addressed.
The IHF feels that the
items requiring attention, in the next phase of the review of the Licensing
Laws, are the updating of the requirements for access to new licenses, the regularisation
of anomalies in respect of existing licenses and simplification of the administrative
procedures surrounding the obtaining and renewal of licensees and the obtaining
of exemptions. The combating of underage drinking should also be revisited.
The Federation reiterated
that registered guesthouses should be entitled to serve drink to their residents.
We also expressed the view that the State should be the only party involved
in the physical granting of licenses. It should not be necessary to purchase
an existing license in order to obtain a new license. As an alternative it should
be possible to pay a fee to the Collector of Customs & Excise to obtain
a license for a premises. It was suggested that in order to emphasise the responsibilities
attached to having a license this fee should be at least €44,000.
The submission also suggested
that the provision introduced in the Intoxicating Liquor Act 2000 to regularise
the position of existing hotels that do not have full bar licenses should be
amended to delete the requirement to have been licensed on or before 4 July
1960, providing the premises has traded for the preceding five years.
To reduce administrative
burdens and to create certainty for properties that have regular late night
functions, requiring a Special Exemption Order, it should be possible to make
an application on a blanket basis. It was suggested that this annual application
could be made to the District Court and that a fee of €9,500 be paid in
respect of it.
To help combat the problem
of underage drinking the Federation submitted that the possession of an official
ID card should be mandatory. The presentation of fake ID cards being an offence
punishable by a fine or community service. To further combat the sale of alcohol
to underage persons we called for the person who sells the drink to be liable
to prosecution in addition to the sanctions applicable to the license holder.
In order to regularise
the control of licensed premises, theatres and clubs should be brought within
the ambit of the present licensing system applicable to pubs and hotels and
forced to comply with the same regulations.
COPYRIGHT AND RELATED
RIGHTS ACT 2000
The Copyright and Related
Rights Act 2000 came into effect on 1 January 2001. The Act retains the right
of the record companies to receive fair payment from nightclub operators for
the use of sound recordings in which they hold copyright. The Federation put
enormous effort and committed substantial funds to lobbying as the Bill passed
through the houses of the Oireachtas.
A member’s memo was
circulated to all members advising on the procedure to be adopted to ensure
protection under the provisions of the Copyright and Related Acts 2000. A copy
of the memo is available on http://www.ihf.ie/members/memo/01-06copyright.htm
The long running issue
of determining the level of equitable remuneration payable to Phonographic Performance
Ireland Limited was referred to in my review last year. The hearings of the
Arbitrator, acting on behalf of the Controller of Patents, Designs and Trademarks,
were completed last March. However the decision in this arbitration process
was still not available at the time of writing this report.
A special meeting of our
members involved in the disco and nightclub sector will be convened as soon
as the report is issued to consider the findings and decide on the appropriate
action. As mentioned last year, this is a very expensive process involving an
excellent team of legal and financial experts. In order that the costs of this
process do not come entirely from the resources of the Federation membership
a special fund was put in place to which members involved were expected to make
contributions. Should it be necessary to appeal the arbitrators ruling it will
be necessary to create a further fund to cover the costs involved.
INSURANCE
Two major insurance issues
were a cause for concern for many members during the past year – the exorbitant
increase in insurance premiums and the collapse of the Independent Insurance
Group.
The exorbitant level of
insurance premiums appears to be a result of:
The situation is so bad
that a number of our members are now carrying a substantial amount of risk in
respect of their businesses. The Federation’s policy on this matter is
twofold. It is calling on the Government to establish, a personal injury assessment
board, to overhaul the system of injury litigation to increase efficiency and
reform the determination of legal costs associated with those claims. The Federation
is actively exploring the possibility of setting up an alternative riskfinancing
vehicle to cater for members needs. We have recently circulated members with
preliminary details on this scheme to ascertain the likely level of support.
Should there be sufficient support we believe that it has the potential to,
in the medium to long term, reduce members’ insurance costs through:
Further details on the
scheme will be available at the Annual Conference in Westport.
The collapse of the UK
registered Independent Insurance Group in June 2001 has had very serious consequences
for up to 40 of our members. It is presently estimated that these members could
be exposed to up to €12.7 million worth of claims for which they have no
cover. Notwithstanding lobbying the Department of Enterprise, Trade and Employment
and individual public representatives the Government has taken no action to
remedy this situation. It is indefensible that, in an era of substantial regulatory
control of financial institutions, the Irish Government has chosen not to come
to the assistance of businesses exposed due to the failure of this insurance
company. If the Independent Insurance Group had been an Irish registered company
the Irish Insurance Compensation Fund would have come to the rescue and contributed
to the cost of meeting outstanding claims. This issue will be included in the
pre-election demands of the Federation.
We have proposed that the
levy, put on all insurance premiums when PMPA collapsed, be re-introduced to
meet Irish risks not covered as a result of the collapse of the Independent
Insurance Group. A number of our members have, since the collapse, settled claims
from their own resources. While claims for reimbursement have been lodged with
the UK Financial Services Compensation Scheme to date no re-imbursements have
been received.
Legal advice on the options
open to us has been sought and our members will be kept appraised of the situation.
PRE-BUDGET SUBMISSION
The key issues covered
in our pre-budget submission were:
See http://www.ihf.ie/finance/2001submission.htm
for the full text.
We requested additional
marketing funds to help return Irish tourism to a path of growth. We sought
the creation of a €25 million Tourism Recovery Fund to finance specific
marketing activities targeted at incrementally growing the UK and European markets
and to nurture the US market and prime it for future growth.
We also called for a relief
scheme, similar to that introduced in Northern Ireland following the foot and
mouth outbreak, of a 25% rebate in local authority rates for 2001 or 2002 where
businesses experienced a decrease in turnover of not less than 15%.
At 12.5% Ireland has the
second highest level of VAT on hotel accommodation within the Euro zone. It
is the only country in the zone with a rate of over 10% where VAT is not allowed
as an input for registered businesses. We called for a reduction to less than
10% and the allowance of VAT inputs for registered businesses. The absence of
the allowance of inputs is a major competitive disadvantage to our European
neighbours. The pre-budget submission also sought to have Capital Allowances
clearly applicable to guesthouses and staff accommodation. We also requested
that employers be allowed to pay €5,000 per annum, in respect of each child,
of an employee requiring the services of a registered childcare provider without
benefit in kind implications for the employee. We again called for roll over
relief of up to €1.9 million against capital gains tax to be allowed for
investments made in pension funds and for relief against stamp duty on the incorporation
of a company to assist in the rationalisation of the ownership of family properties.
In keeping with our commitment
to develop a waste management strategy we sought the provision of free depreciation
on all waste management equipment purchased by hotels and guesthouses and a
reduction in local authority rates payable by properties participating in approved
recovery and recycling programmes.
Due to the importance of
good access to all regions we asked that priority be given to delivering, on
time, the road projects set out in the National Development Plan.
While welcoming the allocation
on an additional €11 million for Tourism marketing, €1 billion for
improving roads and €450 million to improve Public Transport we expressed
the view that hopefully these are the first steps to assist in the recovery
of the tourist industry.
INTRODUCTION OF THE
EURO
Throughout the year the
IHF issued guidance, newsletters, check lists and general information regarding
the Euro changeover. A template Euro changeover plan for the hotel industry
formed part of the Euro awareness workshops run by the Federation at branch
level. Meetings took place with the suppliers of property management systems
and other equipment used in hotels sensitive to the Euro changeover. A helpline
was established to aid members with individual problems. We obtained grant support
from the Euro Changeover Board to assist us in these activities.
FOOD SAFETY AND HEALTH
ISSUES
A sub committee of Council
was set up during the year to develop a draft guideline document to assist with
the implementation of HACCP systems. This guideline document has been submitted
to the Food Safety Authority for their approval and will be published and circulated
to members shortly.
There was serious concern
during the year over the risks attached to private water supplies and a guideline
document on precautions to be taken has been finalised and will be issued early
in 2002.
The National Disease Surveillance
Centre discussed with us a draft guide on the prevention and control of Legionnaires
Disease in the hotel and leisure industry. Having obtained expert advice on
the issue we conveyed our views to the centre for incorporation in the guide.
It is anticipated that the guide will be published during March 2002.
ACCESS TRANSPORT
For the last three years
the Federation has been consistent in its calls to the Government to facilitate
the development of low cost access to Ireland. As an island we depend on air
and sea transport as a means of access. We have called into question the conflict
between the Government’s obligation to provide a transport infrastructure
and the operation of airports, as commercial organisations rather than as stimulators
of economic and regional growth.
The Commission for Aviation
Regulation sought submissions on the determination of maximum airport charges.
The Federation made an initial submission, put forward a response to the initial
submissions, made an oral presentation and finally made another written submission
on the draft recommendations of the Commission. During the process we called
on the Minister for Public Enterprise to issue a general policy direction instructing
the Commission to take into account the welfare of Irish tourism. We were pleased
that the Minister responded to this call when she called on the Commission to
make every reasonable effort to ensure that its final determination reflected
the important emphasis that the Government places on balanced regional development.
The thrust of the Federation’s submission was that in determining the maximum
level of airport charges the Commission should aim to facilitate the development
and operation of cost effective airports, while having due regard for the contribution
they make to the regions in which they are located. We also expressed the view
that airports should be run in a cost competitive and operationally efficient
manner. Like the ownership of road and rail networks the responsibility and
ownership of, and responsibility for air infrastructure should remain with the
State, with an effective provider secured to manage it. It is our belief that
the cost of capital expenditure should not be born by the passengers but by
the State. Capital expenditure plans should be subject to consultation with
the Government, Regulator, Airport Operator and other industry and carrier representative
organisations. We were disappointed that the fundamental issue of low cost access
and the integral role it plays in sustaining tourism in Ireland was ignored
in the final determination of the maximum level of airport charges. The Federation
welcomed the exclusion of a return on investment on a large proportion of the
proposed capital expenditure from the charge setting mechanism.
The Federation also welcomed
the recent Government decision to ask Aer Rianta to proceed immediately with
the provision of a rapid turn-around facility at Dublin airport. This facility
is to be available in good time for the 2003 season and is designed to meet
the specific needs of all carriers operating at the lower fares end of the market.
We continue to reiterate
the importance of low cost access to the country and have expressed concern
that with the reduction in the number of air routes in the wake of 11 September
the achievement of our tourism targets will now be very difficult.
WASTE MANAGEMENT
Waste Management is becoming
a major issue as landfill sites approach full capacity. During the year the
Council commissioned the development of a waste management strategy. The strategy,
which is based on the principal of reducing and recycling waste, will be launched
at the beginning of March under the heading of ‘Changing our Ways’.
The document addresses
all the waste streams within an hotel’s operations and suggests methods
of dealing with them. It also details the waste management equipment available
to handle specific areas and identifies contractors and key partners to assist
in its implementation.
IRISH TOURIST INDUSTRY
CONFEDERATION
Throughout the year the
Federation played a major role in the activities of the Irish Tourist Industry
Confederation (ITIC), the umbrella body that represents the united views of
22 major industry players in negotiations with Government, the EU and tourist
boards.
During the year ITIC published
a report on the spatial spread of tourism and extending the season. It recommended
a threetrack approach to spatial balance:
1. The development of all areas, large and small, to the level of their natural tourism potential, where this is properly assessed and reflects genuine market needs.
2. The designation of a small number of new tourism centres, of scale, with particular focus on the BMW region.
3. Policies to maximise the spread of benefits out from tourism centres through ancillary actions. Day trips, pilot projects etc.
The key principals identified
in the study were that all tourism policy should be market led and that the
market involves a variety of different segments – the spatial spread of
which will vary. There is a need to be sensitive towards Ireland’s natural
and cultural resource space, with recognition of the role of key tourism centres
to support both current and potential growth.
Towards the end of 2002
Bord Fáilte, in co-operation with ITIC, commissioned an independent study
into the impact of the foot and mouth crisis, the global economic downturn and
the aftermath of 11 September on Irish tourism. Because of the magnitude of
the challenges identified in the report ITIC has prepared a recovery plan for
the industry based on the findings of the impact study. The Federation provided
input into this exercise. The document will become the foundation for lobbying
for additional State support for the marketing and recovery of the tourist sector.
During the year the President
and I represented the Federation on ITIC delegations to meet the Minister for
Tourism, Sport and Recreation, tourist boards and represented the sector on
task groups set up to address the serious challenges posed.
Through ITIC the Federation
gained representation on the Social Partners Forum and participated in all plenary
and ordinary meetings and served on various working committees attached to the
Programme for Prosperity and Fairness.
HOTREC
The Federation continues
its active involvement in HOTREC, the confederation of the national associations
of hotels, restaurants, cafés and similar establishments in the European
Union and the European Economic Area. We represent Ireland in the organisation
jointly with the Restaurant Association of Ireland.
Annually there are two
HOTREC General Assemblies and this year they took place in Bruges and Madrid,
which coincided with Belgium and Spain assuming the Presidency of the EU.
Substantial effort was
devoted to ensuring that the proposed regulation laying down principals on food
law, differentiated between the retail trade and food service sector. HOTREC’s
position, while accepting that comprehensive legislation in relation to food
safety is essential for consumer confidence, is that this goal can only be achieved
if legislation is drafted taking full account of the characteristics and interests
of all the stakeholders in the food supply chain. New proposals also emanated
from Brussels for a directive imposing the listing of ingredients and allergens
on the labels of foodstuffs. Clarification is being sought on the implications
of this proposed directive on the design of menus with similar recommendations
where the ingredients might include GMOs.
The EU Council agreed a
common position on a proposed directive establishing a general framework for
informing and consulting employees. This proposal aims to establish minimum
requirements for the information and consultation of employees in undertakings
of establishments operating within any EU member state. HOTREC is watching the
development of this directive and the Federation will monitor it and be particularly
attentive to the planned method of introduction into Irish law. Along with every
European employer organisation HOTREC opposes this proposed directive on the
ground of subsidiarity stating that information and consultation of employees
is a matter for national law and not for European wide regulation.
The Commission has also
proposed harmonising rules concerning the conditions of entry and residency
of third country nationals for the purpose of paid employment and selfemployment
within the EU. The intention of this directive is that common criteria would
be set for admitting third country nationals, providing a single application
procedure leading to a combined title encompassing both residence and work permit.
The aim is to simplify and harmonise the diverging rules currently applicable
in member states, providing a flexible framework allowing states to react quickly
to changing economic circumstances. A condition worth noting is the definition
of a period of four weeks during which employers should check the availability
on the community market of candidates for the post.
As standards, labels and
classification are more and more the subject of discussion at European and International
level, HOTREC held seminars on recent trends at European and International level
as part of the General Assembly in Madrid. The seminars outlined new trends
in areas covered and addressed the desire by the World Tourism Organisation
to steer countries towards an international hotel classification system. A joint
World Tourism Organisation / International Hotel and Restaurant Association
study is currently addressing this issue.
HOTREC continues to lobby
for the retention of the reduced rate of VAT on hotel and restaurant services
in any common EU VAT system.
With the recent trend of
mergers involving tour operators, and in cases where tour operators acquire
hotels and transport companies HOTREC called on the EU Commission to carefully
analyse these horizontal and vertical concentrations involving the main tourism
operators which could result in anticompetitiveness. The EU Commission has considered
there is a case for further action in the field of fire safety in hotels, the
increased supervision and monitoring of fire safety, the updating and improvement
of technical guidelines and the application of recommendations to other forms
of accommodation similar to hotels and the identification and dissemination
of best practice for fire safety management monitoring.
On copyright issues HOTREC
maintains contact with the Commission which is continuing its analysis of the
collective management of rights and the operations of collecting bodies. Following
11 September HOTREC has communicated to the Commission the impact on the various
members’ countries. The result of this is that a public hearing of the
EU Parliament has been organised for 11 February 2002 at which the Vice- President
of HOTREC will speak on behalf of the sector. The Federation has conveyed to
HOTREC, the quantification of the impact on Irish tourism.
NORTHERN IRELAND
We continue our close relationship
with the Northern Ireland Hotels Federation (NIHF) in the pursuit of our common
aims. Members of the NIHF can participate in IHF activities in the same manner
as our own members. There are 60 entries from Northern Ireland in the ‘Be
Our Guest’ guide 2002. A joint council meeting with the NIHF that took
place last October, which coincided with their Annual Conference.
BRANCH ACTIVITIES
Throughout the year the
Northbrook Road staff and I attended meetings at branch level. These meetings
updated members on current issues and gave the Executive the opportunity to
listen directly to the views of the members. Some of these visits coincided
with the strategic review workshops or the Euro awareness programme. Seminars
and workshops took place to explain and inform members on the development of
‘irelandhotels.com’ and to help members to prepare for the annual
trade workshops.
ASSOCIATE MEMBERSHIP
We continue to promote
associate members and we currently have 76. Their association with the Federation
has been of benefit to associate members and we urge our members to support
them where appropriate.
APPRECIATIONS
On a personal note I wish
to thank our President Mary Fitzgerald for the assistance, support and guidance
that she has given the staff and I during her two years in office. Her accessibility,
encouragement and willingness to travel enormous distances to lead and support
the activities of the Federation served to inspire and motivate us all, particularly
in the very difficult times of 2001.
The guidance and support
that the staff and I received from the Management Committee, Council and general
membership of the Federation was both helpful and welcome. The willingness of
so many members to actively lobby when requested to do so by the Executive and
Council greatly enhances the profile of the Federation. We will be calling on
members to support lobbying activities in the run up to the general election.
As usual all the staff
in Northbrook Road displayed dedication, patience and support and for this I
am truly grateful.
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