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| Chief Executive's Review |
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Preliminary estimates for 2002
would indicate that approximately 6 million overseas visitors
came to Ireland during the year – an increase of 2% on 2001.
The domestic market appears to have increased by 12 – 15%.
In total the revenues from the tourist industry are estimated
to have been €5.6 billion. This should have netted approximately
€2.5 billion for the Irish Exchequer. Visitors from Britain
at 3.7million increased by 9% on the previous year. North American
arrivals at 815,000 were down about 10% and European mainland
arrivals at 1.4million were up 3% on 2001. The 20% reduction
in the direct airline routes to Ireland from North America could
have been a contributory to 50,000 fewer arrivals from this particularly
lucrative market. A shortage of destination marketing
funds in early 2002, increased operating costs and the erosion
of margins in an environment of reduced economic growth meant
that the Federation was involved in a wide range of activities
from lobbying and marketing to employment issues. Membership The Irish Hotels Federation now
has 940 members made up of 649 hotels and 291 guesthouses. Irish Hotel Industry There are at present 851 hotels with 42,869 bedrooms and 479 guesthouses with 5,300 bedrooms on the statutory register. While definitive figures are not available for 2002 it is estimated that the national hotel occupancy rate was 59% as compared with a 65% rate in 2000. The number of people employed in hotels and guesthouses remained at 57,000, approximately the same level as in 2001. The Irish market now makes up almost 56% of all hotel bed nights compared with 49% in 1999. |
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Tourism Ireland Limited 2002 was the first year that
Tourism Ireland carried out the overseas marketing role for Ireland
previously carried out by Bord Fáilte and Northern Ireland
Tourist Board. Tourism Ireland’s marketing
programmes were drawn up in conjunction with the tourist boards
and the industry North and South. The Tourism Marketing Partnership
has now been extended to the whole island and has an active consultative
role in the development of these marketing programmes. The activities
of Tourism Ireland are two thirds financed by the Irish Government
and one third by the Northern Ireland Executive / UK Exchequer.
The marketing plans for 2003 are based on allocation of €27.9million.
A large portion of the additional €5m., procured in the
recent budget by the Minister for Arts, Sport and Tourism Mr
John O’Donoghue TD, will augment this sum. The overseas
marketing funds are divided among the main market regions as
follows: Great Britain 34%, North America 30%, Europe 32% and
long haul 4%. 63% of this expenditure goes on advertising with
a further 14% on print and distribution. The balance is spread
over trade support, promotion, publicity and direct marketing
activities. Tourism Ireland is investing
substantial resources in e-marketing and the Internet and aims
that its site becomes the website of choice for international
visitors gathering information about holidays in Ireland. The
website also provides a platform for customers to access the
products of Irish suppliers including Federation members listed
on our own irelandhotels.com site. The overseas offices of Tourism
Ireland continue to facilitate the distribution of ‘Be Our
Guest’ and coordinate participation in workshops, travel
fairs and familiarisation trips. The Federation works closely
with Tourism Ireland by participating in a substantial number
of promotions as outlined in the Marketing section of this annual
report. Review of Tourism Policies The Department of Arts, Sport
and Tourism have initiated a major review of tourism policy that
will set out a new policy direction for the renewed development
of the sector. The review will include an assessment of the performance,
competitiveness and potential of the sector and the key determinants
of both an industry and Government strategy for the future development
of Irish tourism. It will address such issues as competitiveness,
quality and pricing, product development and utilisation, environmental
and infrastructural developments, human resources / business
capabilities / enterprise support, marketing, access transport,
regional structures / co-ordination of supporting measures and
research. The Minister for Arts, Sport
and Tourism Mr John O’Donoghue TD has convened a group under
the Chairmanship of Mr John Travers, Chairman of the interim
board of Fáilte Ireland, to carry out the review. Membership
of the high level steering group includes a former President
of the Federation Mr Pat McCann, Chief Executive of Jurys Doyle
Hotel Group Plc, Patrick O’Donoghue Chief Executive of Gleneagle
Hotel Killarney and Tony Kelly Chairman Irish Tourist Industry
Confederation and Marketing Director of Irish Ferries. This review
group is currently seeking submissions from interested parties
on the challenges facing Irish tourism. The Irish Hotels Federation
is at an advanced stage in the preparation of its submission,
the thrust of which will be based on the findings of “Blueprint
for the Future”. The Federation also welcomes
the Government’s commitment, in the proposed national partnership
agreement, to continue to endeavour to use available resources
to best advantage in supporting the marketing and promotion of
Irish tourism. In particular it will seek to broaden our tourist
source markets, to increase our share of the Continental European
Market, to foster expansion and competition on air and sea routes
and to foster product development, including the question of
enhanced national conference facilities Merger of Bord Fáilte
and CERT Legislation is progressing through
the Oireachtas to merge the activities of Bord Fáilte
and CERT into a new national tourism development authority -
Fáilte Ireland. The new organisation will be operational
in 2003 with Shaun Quinn, currently Chief Executive of CERT,
as its Chief Executive Officer. The new body will oversee the
development of the tourist industry. Fáilte Ireland is
expected to play a key role in the implementation of the findings
of the Government review of tourist policies currently underway.
The mission statement for Fáilte Ireland is “To foster
sustainable and competitive tourism development by working in
partnership with industry and State bodies to achieve world class
standards of excellence in the products, services and marketing
of the sector, thereby contributing to wealth creation and employment
in the economy of Ireland and its regions.” Bord Fáilte Throughout 2002 we had many meetings
with Bord Fáilte to address a wide-ranging number of issues.
Particular emphasis was placed on a review of the hotel and guesthouse
regulations. 2002 saw the first year of Bord Fáilte’s
new role in the marketing of Irish tourism focussing on domestic,
product and regional marketing. In excess of €2million was
spent on the promotion of home holidays emphasising the stress
relieving benefits of holidaying in Ireland, and the Federation
participated in a number of joint marketing activities During the year Bord Fáilte
supported the RTE ‘No Frontiers’ programme which featured
10 slots on diverse holiday locations in Ireland. A programme
of journalist familiarisation trips achieved coverage in national
newspapers and support was also given to off-season holiday break
promotions in conjunction with commercial partners. On the golfing
promotion activities front a contract was signed with Padraig
Harrington to promote Irish golf, Ireland staged the 2002 American
Express World Golf Championship and the Seve Trophies, a new
sponsor for the Irish Open was procured and an intensive campaign
for the 2006 Ryder Cup in The K Club is ongoing. Other product
developments included angling, cruising, walking, cycling, English
as a foreign language, heritage, culture, and equestrian holidays. As part of its regional marketing
remit Bord Fáilte coordinated and used a €1.26million
regional marketing fund to part fund the overseas marketing activities
of the six regional tourism authorities and Shannon Development. Review of Hotel and
Guesthouse Registration Regulations As part of our ongoing work to
implement the recommendations of ‘Blueprint for the Future’
discussions took place with Bord Fáilte on a review of
the registration regulations for hotels and guesthouses. The
objective of these discussions was to ensure that any new regulations
contributed to the strategic vision of ‘Blueprint for the
Future’ ‘to create a profitable internationally competitive
industry delivering an excellent product and an outstanding service.’ The final regulations are awaiting
Ministerial approval. (The new regulations will not apply to
premises registered before they come into force and transitional
arrangements are provided for premises in the course of construction).
It is anticipated that the minimum number of bedrooms for hotels
will be 15. The premises will be used primarily for the lodging
or sleeping of travellers and for the provision of services to
such travellers, at reasonable hours, of meals and refreshments,
which shall include breakfast and dinner. The provision of dinner
shall at a minimum mean the availability of a choice of hot-cooked
meals together with desserts. The type of food service is not
as prescriptive as in the previous regulations and the means
of its supply is left to a large extent at the discretion of
the hotel operator. While there is an obligation to have a dinning
area within the hotel it need not be a designated dinning room
and can be incorporated into lounge or bar areas etc. The requirements
for lounge area, kitchen and toilets are simplified. They are
not prescriptive in so far as they acknowledge that the kitchen
area should comply with the requirements of food and hygiene
regulations. Similar changes are to be made
to regulations for guesthouses with the number of bedrooms set
at a minimum of 7 and a maximum of 30. (It should be noted that
both the minimum and maximum restrictions will not apply to guesthouses
already registered). CERT Throughout 2002 the Federation worked closely with CERT, which is now helping businesses to refocus their strategies in the light of the challenges facing the industry. In addition to providing advisory and consulting services, CERT now offers specific tools to enable management attain excellence through the adoption of best practice. An extensive programme of business development support is available to individual enterprises. Intervention mainly takes the form of mentoring and the provision of consultancy services. |
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The Hospitality Best Practice
Gold Service Programme focuses on those actions which leading
hospitality companies are implementing to achieve improved performance.
A number of top hotel companies signed up to the programme in
2002 and are currently benchmarking their operations against
international best practice. The Ireland’s Best Service
Excellence Programme provides a comprehensive company wide programme
for businesses wishing to improve their culture of customer service.
During 2002 CERT continued to extend this programme to hotels,
restaurants, visitor attractions and other tourism / retail service
businesses. Establishments completing the programme are eligible
to apply for the Ireland’s Best Establishment Award. Since
its launch just over 3 years ago 6,550 managers and staff in
73 businesses have completed the programme with 23 establishments
holding the coveted award. The Irish Hotels Federation participated
in a review of the CERT Retain Programme – a practical step
to help improve staff retention, grant aided to support businesses
developing and implementing their own training programmes over
a three-year period. During 2002 CERT introduced a
series of interactive workshops designed to demonstrate the potential
of the Internet and e-commerce to SME businesses. A range of professional development
programmes in the areas of leadership, strategy and management,
operations training and marketing and information communications
training was provided throughout 2002. During the year CERT commissioned
its first major study into the environmental aspects of tourism
and the developments that were taking place in this area. This
study is intended to prepare for the development in 2003 of a
range of innovative programmes to support industry in addressing
environmental issues including eco-tourism and sustainable tourism. Recent research by CERT has indicated
that there will be a requirement for approximately 25,000 new
entrants to the tourist industry every year for the next five
to six years. CERT continues to source new entrants through a
series of flexible recruitment strategies targeting school leavers,
women returnees to work, long-term unemployed and non-nationals. CERT, in conjunction with the
Irish Hotels Federation and the Restaurant Association of Ireland,
supported the publication of Get a Life in Tourism which now
has a print run of 25,000 copies. The Go Places in Tourism Roadshow
demonstrated its value as a highly effective marketing tool in
promoting tourism as a first choice career. Approximately 12,000
school leavers were targeted during the roadshow and the Federation
both at national level and through its branches actively participated
in the events, which visited every region in the country. CERT
opened a new one-stop-shop for careers information, the People
in Tourism Centre in CERT House, Amiens Street which offers an
alternative year-round facility to the roadshow and enables people
to learn more about the many career opportunities available in
the sector. Young Chef of the Future attracted
100 teams, involving 200 pupils, from second level schools. The
Dine and Wine Awards aimed at third-level students attracted
teams from across the country, and the regional heats and national
competitions were broadcast on RTE’s Nationwide programme.
An Irish National Team took part in AEHT Conference and Competitions
in San Remo and returned with one gold and three silver medals. The National Apprenticeship Programme
initiated in 2001 has been very successful and popular with the
industry and has been extended to 11 colleges for the 2002/03
academic year. A National Traineeship in Hospitality has also
been developed, based on the same principles of college lectures
combined with work based learning and will be promoted and piloted
in a number of colleges for the academic year 2003/04. 2002 was the first full year
of operation for the new training centre in Waterford City. The
Cork centre which has operated out of a temporary facility since
June 2002 plans to move to a permanent, dedicated centre in early
2003 and will provide training for approximately 165 people and
will include specialist advice and consultancy services for the
Cork Kerry region. The Return to Work Programme
continues to be successful with an average employment placement
rate of over 80%. In 2002 over 800 adults participated in the
programme, which has been designed for adults who have been out
of the work force for some time and are seeking a return to full/part-time
employment. Since 2001 a total of 200 persons
have completed the International Skills Training Initiative,
which is designed to provide technical, cultural and English
language skills for non-national trainees. The twelve-month programme
comprises three months in a training centre and nine months in
a structured employment and training arrangement in selected
hotels and restaurants. In conjunction with the Tourism
Training Trust Northern Ireland and funding provided by the International
Fund for Ireland CERT has created a Management Development Programme
for hotel owners / managers. This programme is applicable to
hotels in the border regions and has attracted considerable interest
and participation from IHF members in the border counties. Convention Bureau of
Ireland The Irish Hotels Federation has
four representatives on the council of the Convention Bureau
of Ireland – Niall Geoghegan, Matthew Ryan, Pat Chawke and
myself. The function of the council is to advise and guide Bord
Fáilte in undertaking marketing campaigns aimed at attracting
prominent overseas business sectors for conferences, conference
meetings and incentive travel. A major project to market to
international associations continued in 2002. It was put in place
to source leads for international conferences and conference
meetings, follow leads by direct mail and telesales creating
a database of more than 200 prospective leads which have been
passed on to the Irish trade for action. The Conference Ambassador
Programme is aimed at encouraging Irish members of the international
associations of senior executives and multinational companies
to use their influence in attracting meetings and conferences
to Ireland. A database of more than 1200 ambassadors has been
set up. Dublin Convention Bureau The Dublin branch of the Irish
Hotels Federation in cooperation with the Association of Irish
Professional Conference Organisers, Dublin Tourism and Dublin
City Council have set up and provided funding for the Dublin
Convention Bureau. A Business Development Director has been appointed
to head up the bureau. The Director’s main responsibilities
will be to implement plans for marketing Dublin as a leading
conference destination, lead and coordinate industry activities
and facilitate site inspections, identify opportunities, develop
and manage projects through to completion, organise the representation
of the bureau at trade events and promotions and the development
of its membership. The Irish Hotels Federation has three representatives
on the board of the bureau with the balance of board membership
being made up of representatives from the Association of Irish
Professional Conference Organisers, Dublin Tourism and Dublin
City Council. An independent Chairman will be appointed in due
course. National Conference
Centre The Federation continued to lobby
the Government for Exchequer funding to build a state of the
art conference centre in Dublin. In the later part of 2002 we
participated with Dublin Chamber of Commerce in developing a
joint submission to Government that highlighted the business
case for the provision of such a facility. An international conference
centre in Dublin could boost the city’s economic activity
by up to €50million annually and sustain over 3,000 extra
jobs including 1,400 during the construction phase. We will continue
to pursue the matter and we understand that it is the intention
of the Minister for Arts, Sport and Tourism to bring a proposal
to cabinet in the near future. General Election and
Referendum In advance of the general election
the Federation circulated to all candidates a copy of our lobbying
document Return to Growth – regaining the momentum of tourism
growth. In this practical vision for Ireland’s tourist industry
we called on the state to:
In response to these suggestions we welcomed the announcement by the new Minister for Arts, Sport and Tourism Mr John O’Donoghue TD of an additional €3.5million in overseas marketing funding for 2002 and an extra €5million in the estimates for 2003. We also welcomed the energetic efforts of the Minister for Transport Mr Seamus Brennan TD to introduce competition into the operation of airports and airport terminals. We acknowledge the statement in the Programme for Government that the Government will ensure the construction of a state of the art National Conference Centre and promote Ireland as a venue for international conference business. It is also worth noting that in the recent National Partnership Agreement the Government has committed to foster expansion and competition on air and sea routes and to foster product development including the question of enhanced National Conference facilities. We were extremely disappointed at the increase in the rate of VAT to 13.5% announced in the budget. We note that the Government has stated that it will be pressing for the maintenance of the current VAT regime in relation to labour intensive services and construction in whatever common EU VAT regime that may emerge in the future. The Government has reacted to the insurance question and this will be dealt with elsewhere in this review. In the lead up to the Referendum on the Treaty of Nice the Federation prepared and distributed to all members a pamphlet explaining the impact of the treaty. The Taoiseach and his senior Ministers acknowledged the support of Federation in calling for a YES vote. Budget 2003 The Irish Hotels Federation made a submission to the Minister for Finance in advance of the 2003 budget. Our submission focused on three issues marketing, VAT and local authority rates. We called for the maintenance of the 2002 level of marketing activity and a special tourism recovery fund of €20million to finance additional marketing in our key markets of North America, Britain and Europe. We called for the reduction of the rate in VAT for hotel and restaurant services to less than 10% to bring Ireland more into line with our European competitors. We also sought relief on Local Authority Rates for businesses suffering a downturn in 2002. Following the budget, we expressed major disappointment at the increase of the VAT rate to 13.5%, the virtual ending of the Capital Allowances incentive for hotel development and the abolition of Capital Gains Tax rollover relief. We then made detailed submissions on these three issues. We lobbied for the introduction of transitional arrangements to cover contracts for hotel services entered into at the previously ruling 12.5% VAT rate. Our submissions outlined the particular difficulties that members were experiencing as result of the sudden elimination of the Capital Gains Tax rollover relief. We suggested alternatives including maintaining hotel Capital Allowances of at least 10% per annum, restricting the allowances any one investor could claim to €200,000 per annum, retaining hotel Capital Allowances at their prebudget status for existing hotel owners / operators and the extension of the transition period beyond 31 December 2003 in respect of planned developments. We called for these issues to be addressed in the Finance Bill. The effects of the Finance Bill 2003 on these issues were as follows: We were unsuccessful in obtaining any transitional arrangement in respect of the increased rate and the provisions of the bill confirm that the 13.5% rate applies to all sales from 1 January 2003 including pre-existing contracts. The bill provides for substantial improvement in the transitional provisions which will allow the continued availability of the seven year write off period in respect of the expenditure where a full and valid planning application is received by the relevant local authority by 31 May 2003 and the qualifying expenditure is incurred by 31 December 2004. A transitional arrangement is provided in respect of disposals of assets on or after 4 December 2002. Where the planned reinvestment of the proceeds had been made before that date, the relief against the Capital Gains Tax liability will be available as under the pre-budget legislation. In this case the replacement assets would have to have been acquired or an unconditional contract for the acquisition entered into before 4 December 2002. Disposal in respect of which the relief is sought would have to take place within a year of the date of the reinvestment. Waste Management Strategy The Federation in association with Musgrave Foodservices has produced a comprehensive and easy to follow set of guidelines to help hotels and guesthouses adopt best practice in waste management. These practices are environmentally friendly, cost effective and can satisfy the disposal requirements of local and national authorities. The will also enable members to fulfill their legal obligations in relation to waste disposal. The strategy is available on CD Rom and details how to implement a waste management strategy, conduct a waste audit, identify current and estimate future waste disposal costs, review the various waste streams and suggests methods for managing them. The hotel sector is the first industry to develop such a tool and we believe that it will positively address some of the environmental challenges facing the industry and result in cost savings for our members. |
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Insurance The escalating cost of insurance is virtually an unbearable burden on most hotel and guesthouse owners. Throughout the year in a number of lobbying initiatives the Federation identified that the principal reason for the current high cost of insurance premiums include exorbitant legal and administrative fess which can absorb 40-60% of the total cost of claims, higher compensation awards than most other countries, an ever increasing compensation culture which is being fed by solicitors promoting their services on a no win no fee basis, an increasing incidence of exaggerated and fraudulent claims and a lack of competition within the insurance industry. To address these issues we called for the establishment of a personal injuries assessment board, the implementation of a book of quantum similar to the system operated in the UK, a requirement for insurance companies to notify businesses of renewal premiums at least 30 days in advance and relief for those of our members who suffered from the collapse of the UK Independent Insurance Group. While there is still no evidence of a reduction in insurance premium levels and early indications for 2003 are that we face further increases there have been some positive developments. These include a Government action plan to bring about a reduction in insurance costs, the establishment of a Ministerial level committee, chaired by an Tánaiste and comprising the Minister for Justice, Equality and Law Reform and the Minister for Transport to progress the implementation of the action plan, the establishment of a Personal Injuries Assessment Board on an interim basis pending the preparation of legislation to set up a statutory board, the undertaking of a joint study by the Department of Enterprise, Trade and Employment and the Competition Authority to identify anti-competitive practices or other constraints on competition in the insurance business and a commitment to identify changes in the legal and court practices to compliment these initiatives. The Federation made a submission to the Competition Authority outlining issues of an anti-competitive nature that members experienced. These included the difficulty in obtaining early notice of renewal terms from existing insurers, the practice of insurance brokers being paid commission thereby benefiting from increased insurance premiums notwithstanding their commitment to obtain the best insurance package for their clients and the constraints placed on insurance companies in making alternative quotes available to competing brokers. I have served on a committee set up under the auspices of the Programme for Prosperity and Fairness chaired by the Department of an Taoiseach to explore how this insurance difficulty can be overcome. We will continue our activities in this area during 2003. Our efforts early in 2002 to determine the level of interest for establishing a self insured fund brought only a small response, this was exacerbated by the reluctance of the insurance market to quote competitively for excess cover, consequently we are unable to progress the initiative for the time being. |
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Copyright fees – Phonographic Performance (Ireland) Limited (PPI) The arbitrator acting on behalf of the Controller of Patents, Designs and Trademarks issued a ruling in the long running dispute over the level of equitable remuneration payable to PPI. The ruling suggested a level of remuneration that was in excess of what PPI had demanded. In conjunction with the Irish Nightclub Industry Association we took extensive legal advice on the implication of the ruling and on the avenues available to us. A High Court appeal against the ruling has now been lodged and a legal fund has been put in place to finance it. It is likely that the case will be heard in the first half of 2003. The Copyright and Related Rights Act 2000 came into effect on 1 January 2001. Detailed instructions were issued to members on how to avail of protection under the provisions of the Act against the unreasonable and unwarranted claims made by PPI. The process of this protection included the making of a reference to the Controller of Patents, Designs and Trademarks. Unfortunately the Controller decided to seek the appointment of arbitrators to hear these disputes. One of our members, with the support of the Federation and the Irish Nightclub Industry Association, has now issued a High Court summons to prevent the appointment of an arbitrator and seek the Controllers office to fulfill their statutory obligations under the Act. We will keep members informed of developments in this area. Equal Status Act 2000 and related issues The Equal Status Act and the way in which the Equality Officers interpret it continue to cause concern. Following representations by a number of bodies, including the Federation, the Minister for Justice, Equality and Law Reform asked the Commission on Liquor Licensing to examine the right of license holders to refuse admission and service and to make recommendations for any legislative changes. The Federation made a submission and an oral presentation to the Commission. The thrust of our submission was that licensees had a primary responsibility to provide a peaceful, orderly experience for their staff, customers and in many cases their families. The Federation welcomes the recommendations of the Commission, particularly that the operation of peaceable and orderly premises remains the fundamental condition for the renewal of Intoxicating Liquor Licenses and that the circumstances in which admission or service may be refused should be clearly set out in legislative provisions. The Federation also welcomes the recommendation that existing penalties be increased for drunken persons refusing to leave licensed premises and permit license holders to refuse admission or service to persons who have been expelled previously from the premises for reasons of drunkenness, abusive language, threatening behaviour or intimidation. The Commission also recommended that enhanced discretion be given to refuse admission or service in the case of groups of persons where there is a danger of disorderly conduct, harassment or improper behaviour towards staff, customers or towards the safety of the premises generally. The Commission considers that it is essential that the licensed trade and the Equality Authority participate in dialogue to develop a code of practice on access to licensed premises and is calling for representatives of the licensed trade to re-engage to draw up such a code. The Commission heard numerous concerns regarding the procedural shortcomings of hearings before the Equality Officers that included: a) The right of the complainant to seek information from the respondent without reciprocal right b) The procedures for the giving of evidence at hearings c) The lack of cross examination rights d) The making of submissions before hearings It became clear to the Commission, during deliberations, that there is no uniform approach to the way hearings are conducted and that the Equality Officer hearing the case determines the approach. This lack of consistency generates uncertainty and a lack of confidence in the adjudication process consequently the Commission believes that due process must apply in proceedings under the Equality legislation and that uniformity while desirable should not be at the expense of fairness. The Commission recommends that an independent study of the procedural issues be undertaken. Serious concern was expressed in submissions to the Commission on the suitability of the present adjudication system. The Commission considers that some adjustment to the current structures may be necessary on the lines of current Labour Court or Employment Appeals Tribunal System. In general, the Commission advocates recourse to the District Court in dealing with all licensing issues. The Federation and its licensing committee would welcome any of these developments. In line with the recommendation of the Commission and a request from the Minister for State at the Department of Justice, Equality and Law Reform, the Federation in conjunction with the Licensed Vintners Association and the Vintners Federation of Ireland have drawn up a draft set of house rules presently under consideration by an Garda Síochána and if acceptable will be submitted to the Department. These house rules could become a code of practice for determining the level of acceptable behaviour in licensed premises. Having lobbied the Government to outlaw the practice of parking caravans without permission on private property the Federation welcomed the bringing into law of legislation to this effect. Successor PPF Agreement and Hotels Joint Labour Committee With the Programme for Prosperity and Fairness coming to an end protracted discussions have been on going since last October with the aim of drawing up a new national understanding. Through the Irish Tourist Industry Confederation the Federation has been actively involved in these discussions. While the pay element of the new agreement has been the subject of direct talks between IBEC and the ICTU we participated in bi-lateral discussions with Government Departments under the Chairmanship of the Department of an Taoiseach and in plenary sessions at which all five social partners were present. The aim of these discussions was to arrive at agreement on the nonpay elements of the new social partnership. At the time of writing the pay element of a new agreement was being considered by both employers and trade unions with a reasonable expectation of acceptance. The recommendation on pay is to provide for an increase of 7% over eighteen months. Also included in the pay agreement is a commitment by the Government to develop a new anti-inflationary initiative targeting key sources of inflationary pressure. The Government is also committed to increasing the statutory redundancy terms to provide for two weeks pay per week of service, plus existing bonus week, in the calculation of redundancy payments. The Government is also committed to increasing the statutory minimum wage to €7.00 per hour with effect from 1 February 2004; this figure will not be adjusted again before 1 May 2005. The shared overall goal of the new Agreement is to continue towards the National Economic and Social Council vision for Irish society in terms of economic inclusion based on full employment, consistent economic development in a socially and environmentally sustainable manner, social inclusion and commitment to social justice and continuing adaptation to change. The Hotels Joint Labour Committee made a new Employment Regulation Order effective from 1 May 2002 incorporating the second phase of PPF, an increase of 5.5% with a minimum of €13.97 per week plus the payment of a special 2% adjustment and the 1% lump sum. Agreement has recently been arrived at to incorporate the effects of the final phase of the PPF, an increase of 4% with a minimum of €11.43 per week. It is likely that this adjustment will be effective from mid March 2003. As the current JLC does not include the County Borough of Cork and the County Borough of Dublin and the County Borough of Dun Laoghaire efforts were made by SIPTU to bring these areas within the ambit of a JLC. The Labour Court considered the application and the Federation made a submission that due to the existence of a wide range of employment protection and legislation including the National Minimum Wage Act the JLC was no longer an appropriate mechanism. We also submitted that should the Court rule in favour of JLCs covering these areas the most appropriate manner would be to have one JLC for the whole country. We are still awaiting the Court’s decision on this matter. Irish Tourist Industry Confederation (ITIC) Throughout the year the Irish Hotels Federation played a major role in the activities of the Irish Tourist Industry Confederation, the umbrella body that represents the united views of twenty two major industry players in negotiating with Government, the EU and tourist boards. During the year ITIC commissioned and published a report “The impact of tourism on the Irish economy – the need for a future development strategy”. Tansey, Webster Stewart & Company Economic Consultants prepared the report. Its objective was to outline the substantial contribution of tourism to economic development, to identify competitive threats to tourism growth and to recommend a strategy for returning the industry to sustained expansion. The report highlighted the need for a new tourism development strategy and indicated the rationale for formulating such a strategy based on five factors: i. What’s good for tourism is good for the national economy ii. A self-starting revival in tourism is not automatically guaranteed iii. Tourism’s future is not within its own hands iv. Tourism is an indigenous industry populated principally by SMEs v. Tourism offers genuine prospects for commercial regional development The Minister for Arts, Sport and Tourism Mr John O’Donoghue TD announced a major review of tourism policy, shortly after receiving the ITIC report and this review will incorporate many of the issues highlighted and called for. Throughout the year ITIC, as a member of the business pillar of the National Social Partnership structure participated in all plenary and relevant bi-lateral meetings. It provided input into the Tourism Marketing Partnerships, which have input into the development of the marketing strategies of Tourism Ireland Limited and Bord Fáilte. ITIC’s pre-budget submission and reaction to budget measures strongly supported the line taken by the Irish Hotels Federation and other tourism sector members. ITIC commissioned a report Recovery Programme for Tourism in which TTC Consultants analysed prospects in each of the key markets and produced a plan for an additional expenditure of €20 million for overseas marketing. An updated Report on Industry Marketing Spend undertaken by TTC Consultants showed an increase in the level of Industry Spend in overseas markets. Total spend amounted to €135 million in 2001. Health and Safety Issues and Proposed Smoking Ban During the year the Federation, in conjunction with the appropriate statutory authorities, issued guidelines on the minimisation of the risks of Legionnaires Disease in hotels, a practical guideline on Water Quality and guidelines for the Control of Outbreaks of Gastric Flu (winter vomiting bug). We are currently in discussion with the Health and Safety Authority on the impact of regulations on the exposure to noise in the entertainment industry. This subject is also dealt with in a provision by the EU Parliament and Council members, which suggests that a code of practice be drawn up in consultation with social partners to determine practical guidelines. The Minister for Health and Children Mr Micheál Martin TD recently announced his intention to introduce a prohibition on smoking in the work place with effect from 1 January 2004. This issue has major implications for the hotel and bar business and we have sought a meeting with the Minister to discuss the practical implications of this proposal. Commission on Liquor Licensing The Commission on Liquor Licensing issued two reports during the year its Second Interim Report in July and a report on admission and service in licensed premises in December. The latter report is covered under the Equal Status Act section of this review. I am a member of the Commission on Liquor Licensing and ensure that the interests of the hotel and tourism industry are reflected as strongly as possible within that forum. The thrust of the Second Interim Report was to recommend that all licensing matters be entrusted to the District Court with a fast track system being devised by the Circuit Court for licensing appeals. It recommended that the current licensing procedure for nightclubs be retained but with provision being made for exemptions being granted up to three, six or nine months in advance. The licensing regulations for theatres and places of public entertainment should also be brought into line with normal licensing requirements, with all applications for the issue of such licenses being dealt with by the District Court. The report also suggested that legislation should be introduced to give licensees discretion in relation to the presence of children on their premises. The Commission is committed to submitting its final report by the end of March 2003 and among the areas that it is currently considering is the question of trading hours. The Irish Hotels Federation has a particular concern that at least a two hour differential exists between the time to which special exemptions may be granted for nightclubs and normal bar trading hours. Failure to maintain this differential would be a serious threat to the viability of nightclubs and could lead to their widespread closedown. It is the view of the Licensing Committee of the Federation that the regulations on nightclubs should provide for their operation until at least 2.30am and thereby bringing them in line with international practice. Earlier closing of nightclubs could detrimentally affect a number of small family owned seasonally operated hotels and also have a major negative impact on weekend tourism to Dublin and other cities. 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 participate in IHF activities in the same manner as our own members. There are 65 entries from Northern Ireland in ‘Be Our Guest’ 2003. The Federation is currently involved in a number of cross boarder tourism initiatives including an e-commerce development programme, the production of an all-island newsletter and a development programme for employees in small hotels to be more effective in winning business when attending overseas conventions and exhibitions. These initiatives are aimed at the six counties of Northern Ireland and the six border counties in the Republic. Local Authority Rates and Funding of Local Authorities The burden of local authority rates is now unbearable for many hotels and guesthouses throughout the country. The narrow rate-paying base in many counties particularly in traditional tourism areas further exacerbates the situation. The thrust of national fiscal policy to put constraints on the funding of local authorities and place a greater demand on them to raise their own taxation and charges is an area of great concern, particularly as such revenue raising activities would be at the expense of the business sector. The long running question of the inequity of such a large number of providers of commercial tourism accommodation not being subject to local authority rates is still a cause of unfair competition. This sector includes all bed & breakfast providers, be they approved or unapproved, self-catering facilities, university hostels and short let apartments. The Federation continues to lobby to have this anomaly resolved and will be putting pressure on the Minister for the Environment and Local Government on the development of a new Rates Bill to address this matter. The cost of the implementation of the benchmarking award for the public sector and the necessity for local authorities to meet the additional wage and salary cost from their own resources makes this issue more acute. HOTREC The Federation continues its active involvement in HOTREC the confederation of the national associations of hotel, restaurants, cafés and similar establishments in the European Union and European Economic Area. We represent Ireland in this organization jointly with the Restaurant Association of Ireland. Annually there are two HOTREC general assemblies and this year they took place in Copenhagen and Rhodes, which coincided with Denmark and Greece assuming the Presidency of the EU. Set out hereunder is a brief summary of the areas currently being covered by HOTREC. Eco-label for tourist accommodation In February 2003 the EU Commission will establish ecological criteria for awarding the Community eco-label the EU Flower. Eco-labels already exist at national and transnational level in most EU member states. Ireland does not have an eco-label system for tourist accommodation. In line with the increasing demand for eco-friendly tourism the development of such a label could be an advantage. Taxation In the coming months the Commission should present proposals to overhaul the present structure of the reduced rate of VAT. For years HOTREC has demanded the application of the mandatory reduced rate to hotels, restaurants and cafés. This situation will be monitored and the appropriate lobbying carried out where necessary. Food In conjunction with EMRA (European Modern Restaurant Association) FERCO (European Federation of Contract Caterers), HOTREC recently issued a joint leaflet Restaurants Serve Meals; Retailers Sell Food which stresses the need to address differently restaurants and shops as far as the labeling of ingredients and traceability are concerned. It is intended that this leaflet will be launched at a joint session with the European Commission and Parliament during March 2003. Copyright It is anticipated that the European Parliament will draft during 2003 its report Community framework for collecting societies in the field of copyright, HOTREC plans to hold a seminar on copyright at the general assembly in Dublin in October 2003. Enlargement of the EU With the EU likely to increase to 27 members over the coming years HOTREC will extend its activities accordingly and the seminar on this enlargement will take place in April at the next HOTREC general assembly. Throughout 2003 HOTREC will be particularly looking at a list of new proposals from the EU Commission including communication on the new VAT strategy, a proposal for regulation on nutritional health claims, various proposals on the modernisation of anti-trust rules, the revision of the directive on a European Work Council in transnational enterprises and a communication on the sustainability of European tourism. Mr Joaquim Cabrita Neto of Portugal took over the office of President of HOTREC on 1 January 2003. He succeeded Mr Niels Nygaard of Denmark who led the work of HOTREC during the last four years. Branch Activities Throughout the year the staff at Northbrook Road and I attended meetings at Branch level. These meetings gave us the opportunity to update members on current issues and enabled the Executive to listen directly to the views of members. Seminars and workshops took place to explain and inform members on the development of the irelandhotels.com website and to help members prepare for the annual trade workshops. Associate Membership We continue to promote Associate Membership and currently have 70 members. Their association with the Federation has been of benefit to associate members and we urge our members to support them where appropriate. Appreciation On a personal note I wish to thank our President Jim Murphy for the assistance, support and guidance that he has given us during last year. His accessibility, encouragement and business approach served to motivate and encourage the Executive during a difficult year. The guidance and support that the Executive 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 greatly enhanced the profile of the Federation. We particularly appreciate the assistance given in the lobbying activities in the run up to the general election and in support of the campaign for a YES vote on the Treaty of Nice. As usual all the staff in Northbrook Road displayed dedication, patience and support and for this I am truly grateful. |
| Chief Executive's Review |