BUDGET 2006 
HOTEL CAPITAL ALLOWANCES ENDS 
- VAT REMAINS KEY ISSUE

Budget 2006 specified plans to phase out the current hotel capital allowances by 2008. The current scheme will apply for capital expenditure incurred up to the 31st Dec 2006. Full tax relief will be available for qualifying expenditure up to end-December 2006; 75% of normal relief in the period January to end-December 2007 and 50% of normal relief in the period January to end-July 2008. After which case, the special hotel scheme will no longer apply.

These transitional measures will apply only to projects that will have incurred at least 15% of qualifying construction costs (not including site costs) by 31 December 2006. These measures will only apply to properties for which full planning permission (where planning permission was necessary) was applied for before 31 December 2004. Details of the provision, which will be discussed in advance with the European Commission, will be contained in the 2006 Finance Bill.

In addition, with effect from the 1st January 2007, the ability of persons earning over €250,000 per year to avail of the hotel capital allowance will be reduced by 50% of the amount of income which can be relieved from tax by these reliefs.

Commenting on the Budget’s provisions Richard Bourke, President of the Irish Hotels Federation, acknowledged the clarification on the phasing out of hotel capital allowances but expressed concern that there was no reform on the anomaly where VAT registered businesses can not reclaim VAT on legitimate hotel expenditure. He called on the Minister for Finance to urgently address the serious competitive disadvantage which the Irish VAT system places on business tourism in the forthcoming Finance Bill.

According to Mr Bourke, other than Ireland, every European country with a VAT rate of over 10% allow reclaim of VAT incurred on legitimate business expenses in hotels. “This places Ireland at a major competitive disadvantage in attracting business tourism such as conferences, incentives and major corporate meetings. Even our nearest neighbours Britain and Northern Ireland promote the deductability of such VAT as an attraction for business tourism. We are now asking the Minister for Finance to address this anomaly in the 2006 Finance Bill.”

Continued on pg 2

CONFERENCE CENTRE TENDER ANNOUNCED
New Landmark to Contribute € 50m Annually

It has been announced that the Spencer Dock International Conference Centre Consortium is the designated provisional preferred tenderer to develop the National Conference Centre. Plans for the €400 million conference centre now await final negotiations and approval by the Office of Public Works and, all going well, confirmation will be given next year by the Government for construction to commence. Situated at Spencer Dock in Dublin’s docklands on the North side of the Liffey, the Conference Centre will include a 250 bedroom hotel and a 50 room conference centre with a capacity of 2,000.

The IHF in partnership with IBEC, the Dublin Chamber of

Commerce, the Dublin Convention Bureau, ITIC, the Association of Irish Professional Conference Organisers (AIPCO) and the Business Tourism Forum stated that this is a strategically important element of tourism infrastructure and it will, when operational, be a major contributor to the Irish economy. It was recommended that focus now be placed on securing a definite delivery date and development of a comprehensive international marketing strategy to position Ireland and Dublin internationally as having a specific stateof- the-art national conference centre.

Continued on pg 2

IHF LAUNCHES 2006 
BE OUR GUEST GUIDE

Pictured teeing off from the 19th hole at the launch of the 19th edition of the IHF’s Be Our Guest Guide are (l-r) Dennis Markey, Trade Relations Director, Diageo Ireland, Andrea Roche, Minister John O’Donoghue, IHF President Richard Bourke and Roberta Rowat.

See page 3 for the full story.

The industry bodies stated that certainty of delivery, combined with a major international launch providing details of the facility, should be undertaken to communicate Ireland’s position as a world player in the €40 billion international conference market.

Whilst acknowledging that this is a major construction project that may take up to three years to complete, industry bodies stressed that the international conference market operates on a long lead time basis with conferences being planned five to seven years in advance. A strategic plan for efficient international marketing of Ireland’s new conference centre and targeting of conferences, currently at the planning stage, could result in the centre being used as soon as it opens.

The commitment of John O’Donoghue, TD, Minister for Arts, Sport and Tourism to prioritise the need for this vital piece of national infrastructure was strongly acknowledged by trade and tourism representative bodies.

The global conference market is worth up to €40 billion per annum, with 870 international association conferences taking place in Europe alone. It is estimated that an additional 19 major international conferences would be held in Ireland each year if a conference centre was built. This would attract an additional 44,000 delegates, representing 153,700 delegate days and additional revenues of more than €50 million annually to the Irish economy.

It is estimated that the centre would provide an extra 3,100 jobs to the economy, including 1,400 during the construction phase, and would generate an extra €140 million for the Exchequer in tax revenues.

Pictured welcoming the Conference Centre announcement are (l-r) Richard Bourke, President, Irish Hotels Federation; Catherine Reilly, Chairwoman, Irish Tourist Industry Confederation; Jean Evans, Chief Executive, Dublin Convention Bureau; Aebhic McGibney, Director of Policy, Dublin Chamber of Commerce and Peter Malone, Chairman, Business Tourism Forum.

Richard Bourke, President, IHF, stated that it is estimated that the National Conference Centre will generate at least €50 million per annum to the economy and place Dublin and Ireland firmly on the international conference circuit.

“The period between the announcement of the conference centre and its actual opening should receive the same intensity of marketing attention and focus as plans for the Ryder Cup 2006, so as to ensure maximum awareness across all markets. It will be during this construction phase that advantage can be taken to market the centre internationally and gain a share of conferences that could be held in the facility as soon as it is opened.”

“It’s imperative that an international launch is held to announce the specific plans for its delivery once agreed, so that conference planners can put Ireland into their schedules when organising major events for three years onwards.” Richard Bourke said.

The Irish hotel VAT rate of 13.5% is the sixth highest in the expanded EU and the second highest of the Eurozone nations, behind only Germany at 16%. In addition, this non reclaimable VAT situation places Ireland at a further competitive disadvantage in trying to attract conferences, corporate meetings and incentive travel to consider Ireland as a location for events.

“Unless this anomaly is addressed Ireland will not be in a position to compete for a fair share of the €40 billion global conference and incentive travel business with such an anti business VAT regime. The Government, through its Tourism Policy Review Group, has set ambitious targets to increase visitors to Ireland to 10 million by 2010. The fact that this VAT disadvantage has not been rectified will impede this target being achieved as Ireland is not attractive to the valuable business tourism market when compared to other countries where this VAT can be reclaimed as an expense. Now that there has been significant progress made for the provision of a National Conference Centre, this continued VAT anomaly, unless addressed, will undermine marketing efforts to place Ireland on the international conference map,” says Mr Bourke.

The IHF welcomed the increase in the disposable income resulting from changes in personal income tax and childcare provisions. It also welcomed the additional funding for major capital projects which will hopefully speed up the implementation of the Transport 21 initiative, thus easing the difficulties of travelling throughout the country.

Four members of the IHF received awards as regional finalists at the 2005 Fáilte Ireland Welcome Awards ceremony in Dublin in December. Awards were presented by Minister for Arts, Sports and Tourism, Mr John O’Donoghue, TD, to Aidan Ryan of The Berkeley Court Hotel, Dublin; Paul and Marie Gallagher of the Nesbitt Arms Hotel, Co. Donegal; Peadar and Mary Hevey of Boyne Valley B&B, Co. Meath, and Trevor Toner of Lacken House, Kilkenny.

The overall national winners were mother and daughter Bernadette and Michelle Ryan of Charleville, Co. Cork. The Ryans were nominated by Mike Staisiunas from Illinois after his rental car broke down outside the Ryans’ home on their way to a family wedding in Kinsale. Eighteen year old Michelle, who was preparing to sit her last leaving certificate exam that day, invited them into her home, gave them a key to the house and helped them make contact with the right people so they could get back on the road.

Minister for Arts, Sports and Tourism, Mr John O’Donoghue, Aidan Ryan of the Berkeley Court Hotel, Dublin, and Gillian Bowler, Chairman, Fáilte Ireland. Aidan was nominated for the award by John Moloney from Florida whom Aidan assisted after he injured his knee while celebrating his 50th wedding anniversary in Ireland.

Other regional finalists were:

Speaking at the awards ceremony Minister John O'Donoghue said, “Each of the winners here today is a hero and a true inspiration to all of us. They show that the ancient tradition of hospitality continues to thrive within an Irish society that is constantly assailed by the pressures of commercialism. Nine out of 10 overseas visitors said that friendly and hospitable people were an important factor in choosing an Irish holiday. All 3,000 nominees are worthy of the recognition they have received, and the 10 finalists are truly exceptional.”

Michelle and Bernadette Ryan.

The US-Ireland bilateral air agreement has been re-negotiated, and will allow for increased air routes and new gateways from the US to Ireland. However, while the eventual removal of the compulsory transatlantic air services is a concern and presents challenges to the South West of Ireland, it must be considered in light of increased visitor numbers to the entire island and knock-on benefits to the local region.

Specific marketing measures will have to be undertaken with Government assistance to ensure the region makes a smooth transition to the new regime without significant losses in tourism numbers. These should include the provision of ringfenced funds of at least 10m for marketing the region and a prioritisation of infrastructural improvements.

The finalisation of the bilateral agreement gives Ireland the potential to double the number of US visitors to Ireland by 2012 to two million. This should result in almost 150,000 extra US visitors to Ireland each year adding 100m in revenue to the Irish economy. The announcement has been welcomed by all industry and private bodies - IBEC, the Chambers of Commerce, ITIC and Aer Lingus who all rallied support for the development.

Minister Cullen proposes to prepare an economic and tourism development plan to ensure that Shannon Airport sustains and grows transatlantic air services. In addition, he suggests that plans announced as part of Transport 21 will enhance the infrastructure of the Shannon region and broaden the catchment area of the airport through the completion of the Dublin to Limerick motorway, the building of the Atlantic Road Corridor and the re-opening of the Western Rail corridor. The feasibility study of the Shannon rail link is currently examining linking Shannon Airport to both Limerick and Galway cities by rail.

The announcement will allow airlines to open new routes between Ireland and a range of previously unavailable US destinations. While optimism is high that the agreement will have a significant positive impact on visitors to Ireland, its ultimate impact will rely on airlines seeing the commercial value in new routes.

The availability of frequent, competitive access to Ireland, particularly on the North Atlantic route, is essential to Ireland's tourism growth, as this is a major factor determining where a tourist chooses to visit.

Areas like Dallas, Orlando and San Francisco have large untapped populations interested in visiting Ireland but without easy access to direct air travel. The American market is hugely important, with American holidaymakers tending to spend longer in Ireland than any other nationality. They also tour more extensively to different parts of the country when they are here, and they spend more. The average US visitor spends 900 in the country compared to less than 500 by all other overseas visitors.

In 2004, 54% of all US visitors flew directly to Ireland while 46% came via the UK or mainland Europe. The trend for direct flights by US visitors has grown steadily since 1995 and indicates a high potential for further development. Richard Bourke, President, IHF stated that the proposed change in the status of Shannon airport is now less than a year away and it is essential that a strategic plan for the region is announced and resourced as a matter of urgency in order that the challenges posed can be turned into a sustainable advantage for the region. "It will make sound Government investment sense as there is a proven seven fold return on its investment in tourism marketing."

Speakers:

• An Taoiseach, Bertie Ahern, TD
• Minster for Arts, Sport & Tourism, John O'Donoghue, TD
• John Bowman - Conference Chairman
• David McWilliams - Economist, Author & Broadcaster
• Simon Cooper, President & CEO of the Ritz-Carlton Hotel Company
• Catherine Fulvio - Ballyknocken Country House
• Eoin & Evan Doyle - Brooklodge and Wells Spa
• Simon Woodroffe, Founder, YO! Sushi

The full conference programme will be on www.ihf.ie by 19th December 2005.

BE OUR GUEST - 
INDUSTRY GEARS UP FOR RYDER CUP 2006

The importance of golf tourism and activity based holidays was the theme at the launch of the IHF's 2006 Be Our Guest Guide, Ireland's premier accommodation guide sponsored by Diageo Ireland and featuring some 1,000 guesthouses and hotels countrywide. The IHF stated that the Ryder Cup 2006 will be a major international showcase for Ireland demonstrating to the world the quality of the Irish golf product and is expected to generate over 130m to the economy when it takes place in September 2006. It maintains that activity based holidays including golf, walking and angling holidays are key attractors for visitors to Ireland and should be further promoted in international marketing campaigns by industry and State tourism bodies for 2006.

IHF President Richard Bourke pictured at the launch of the 2006 Be Our Guest Guide with Julie Gilhooly, Vice President, IHF.

The 2006 Be Our Guest Guide, which was launched by Mr John O'Donoghue, TD, is the most comprehensive guide to Irish accommodation with properties ranging from small family run guesthouses and country houses through to five star hotels. Now in its 19th year, almost 400,000 copies of the guide will be distributed in over 22 countries worldwide to promote Ireland as a quality destination.

Dedicated sections on golfing holidays, spa breaks, conferences and angling are included in the 2006 Be Our Guest Guide.

Gerard Hanratty of the Glengarriff Eccles Hotel and IHF Cork Branch Chairperson John Gately of the Vienna Woods Hotel leaf through a copy of the 2006 Be Our Guest Guide.

The 2006 Be Our Guest Guide is a key marketing tool in promoting Ireland both at home and abroad, and contributed to securing over six million overseas visitors to Ireland in 2004. The guide is complemented by Irelandhotels.com, an all island booking and information website, which currently receives in excess of 105,000 unique visitors per month from key US, British and domestic markets. With current visitor levels calculated at 1.3 million per annum, key attractions include the selection of tailored packages available as well as the ability to book gift vouchers online.

Annette Devine, Majestic Hotel, Tramore and Gillian Butler, Waterford Castle Hotel at the launch of the 2006 Be Our Guest Guide

Galway-Mayo Institute of Technology held its annual Conferring of Awards ceremony in November. Among those who graduated was Sinead Moore, the proud recipient of the IHF and Glenlo Abbey Award for Best Student on the Bachelor of Business in Hotel & Catering Management course. John Power, Chief Executive, IHF, presented Sinead with her award on the day. Sinead was also the winner of the Great Southern Hotel Award for Student of the Year. Sinead said she was "delighted to achieve the award" and informed Innsight that she is currently enjoying a career working with guests services at Galway's 5 star G Hotel.

Pictured at the presentation are Sinead Moore and John Power, Chief Executive, IHF.

Leading hotelier Francis Brennan of the Park Hotel, Kenmare, was honoured with a Lifetime Achievement award, at the recent HSMAI awards. The driving force behind the positioning of the Park Hotel as an internationally renowned property with excellence in standards across all services, Mr Brennan received the honour at a gala dinner in the Burlington Hotel.

Speaking at the reception to accept his HSMAI Lifetime Achievement Award Mr Brennan said he was thrilled to be the recipient of the award. "This is a wonderful industry. It offers you the opportunity to see the world, meet wonderful people and occasionally get an upgrade on a flight!" he said.

Mr Brennan is originally from Dublin and studied hotel management at Cathal Brugha Street. In 1980, at just 23 years of age, he joined the Park Kenmare as General Manager. In 1984, he leased the hotel and later bought it outright in 1986. During his tenure, it has been internationally acclaimed for its excellence. It is consistently listed in the Conde Nast Traveller amongst the world's top hotels. The opening of the SAMAS spa in 2004 brought the Park to new levels of recognition with the spa receiving some 22 international awards.

Other winners on the night were:

• Galway Bay Hotel for Best Customer Retention Strategy,
• The Westin Hotel for Best Sales & Marketing Team,
• Radisson SAS Galway for Best Sales & Marketing Strategy,
• David Collins (Lynch Hotels) for Best Sales & Marketing Professional, and
• Mercedes Bagnall of the Hilton Dublin Airport Hotel who received the Paddy Fitzpatrick Award for young Irish talent in hotel sales & marketing.

Failte Ireland recently led a five day visit to Jumeirah in Dubai, offering hospitality industry leaders the opportunity to experience how the international hotel group has committed to and achieves an exceptional offering across its properties, which includes the Burj Al Arab, Dubai.

The participants of the Optimus Programmes' trip to Dubai.

Some 21 senior executives from a range of four and five star hotels in Ireland visited Dubai in October as part of their participation in the Optimus programme through Failte Ireland. At the heart of Optimus is the concept of benchmarking and the Jumeirah visit provided world class benchmarks for the Irish hotels to compare and modify their systems and practices. Comments from those who took part in the visit were overwhelmingly positive.

Niall Rochford, General Manager, Ashford Castle said, "It was the most incredible hotel experience that I have ever had. If you are a passionate hotelier this was the trip to be on." John Gately, General Manager, Country Club Hotel, Cork City, and Chairman of the local IHF Cork Branch concurred, commending "the continuous pursuit of excellence at all levels."

Jumeirah was founded in 1997 with the clear intention to become a hospitality industry leader with a global presence, and the group is set to create 40 new hotel openings over the next three to five years. While Jumeirah operates with certain advantages, including labour supply, its output is remarkable. "The quality model drives it," according to Dr Tony Lenehan, Head of Industry Development, Failte Ireland. "Each property is quite unique, yet Jumeirah manages the customer experience consistently from A to Z."

The Burj Al Arab, Dubai.

The Irish hoteliers found management systems within the group to be cutting edge, particularly in the area of customer relationship management, creating a highly personalised experience for the guest. Encouragingly, Jumeirah's operations are in line with the Dubai Quality Award model, which is similar to Optimus. "The challenge is now to progress the Optimus agenda throughout our operations," said Paul Carey, Group Sales and Marketing Director, Carlton Hotel Group, who also attended the trip.

Atrium of the Burj Al Arab, Dubai