Wednesday brings the interim results of Jurys Doyle, the largest hotel group in the State. The figures cover the six months to last October and will reflect the impact of both the foot-and-mouth epidemic as well as the early stages of the economic fall-out from September 11th.
Given its size, Jurys Doyle is a reasonable proxy for the tourism industry and the results will give us an insight into how the sector is performing. Although it has operations in the UK, Europe and the US, the company still derives well over half its sales from the Irish market.
Jurys Doyle has already warned that trading is difficult and that yields are under pressure. Brokers expect that earnings in the six months will be somewhere between 35 and 40 cents per share compared with 48 cents per share in the same period in 2000. In profit terms, this will equate to a fall of more than £5 million (€6.35 million) to somewhere in the region of £25 million.
The figures will put some flesh on the bones of recent gloomy reports from Bord Fáilte and the Tourist Industry Confederation which say that visitor numbers were down 5 per cent last year with a resulting fall in revenue of €350 million.
They also say some 11,000 jobs in tourism are at risk this year and it is easy to see why. If Jury Doyles' earnings for the period are down somewhere in the region of 20 per cent, then it stands to reason that the earnings of the hundred of small hotels and bed and breakfasts are down by a similar margin - if not more.
The Government is well aware of the problem and, to be fair, was quick to establish the grandiosely titled Ad Hoc Interdepartmental Group on Visitor Issues in the wake of the September 11th attacks. One of the first things the committee looked at was how more tourists could be encouraged to visit Ireland. The debate quickly fused with the ongoing row over airport charges which Ryanair has consistently maintained are too high for low-cost carriers wanting to open new routes into Ireland.
In mid-November, the secretary general of the Department of Public Enterprise wrote to Mr Noel Hanlon, Aer Rianta's chairman, enclosing the committee's recommendations. The report called for lower charges and, more significantly, the development of dedicated facilities at Dublin airport for low-cost airlines such as Ryanair.
It is now the second week in January and you would assume that Aer Rianta was well on the way towards implementing the action requested by its shareholder, the Government. Needless to say, this is not the case. Since mid-November, the State-owned airport company has embarked on a spirited campaign to rubbish the committee's recommendations and has failed to comply with its wishes.
Aer Rianta has told the committee that the plan is unworkable and put forward its own watered-down proposals instead. It has also told the Government that the development of tourism is not part of its remit and that its sole objective is the profitable administration of State airports. To that end, the company wants to focus any new measures on its airports at Shannon and Cork and has marshalled a fine array of legal reasons for why it cannot do as it has been asked.
On top of this, Aer Rianta has proceeded with its plan actually to increase airport charges. In December, the company won leave in the High Court to appeal a ruling by the Commission for Aviation Regulation which put a cap on airport charges last August. This will come to court next month. But before that, we will have the outcome of another appeal on the issues to a three-person body established by the Minister for Public Enterprise, Ms Mary O'Rourke.
This may resolve the current impasse. If the appeal body finds in favour of the regulator, the board will come under pressure to resign. Leaving aside the current impasse, the criticism of Aer Rianta voiced in the regulator's ruling last August raises very serious questions about the way the company has been run.
Mr Bill Prasifka, the regulator, concluded that only £272 million (€345 million) out of a £1 billion investment plan was sufficiently justified for it to be paid for out of airport charges. It was a damning indictment for any management and the board responsible for overseeing its strategy. For the record, the Aer Rianta board comprises three worker directors, the chief executive Mr John Burke and four non-executives including Mr Noel Hanlon, the chairman.
Mr Hanlon was appointed in October 1994 by Albert Reynolds' government and he is close to the former Fianna Fáil taoiseach. One of the non-executive directors, Mr Dermot O'Leary, is also closely associated with Fianna Fáil and was appointed in 1992 and reappointed by the current Government in 1997. Mr O'Leary resigned as chairman of CIÉ in 1995 at the request of the then Fine Gael Minister for Transport, Mr Michael Lowry.
Mr Tadhg O'Donoghue, a senior partner with PricewaterhouseCoopers, was appointed in November 1997 by the incumbent minister and is considered to be close to Ms O'Rourke. He is also chairman of the ESB. The final non-executive director is Mr Liam Meade, who was appointed last April and is the vice-president (marketing) with Shannon Engine Support, an engine leasing company.
However, all the signs are that the board will not resign - even if the appeal board finds against it - which raises the un-edifying prospect of a continued stand-off with the Visitor Issues Committee. The matter is due to come to Cabinet shortly and some of the other departments represented on the committee have made it clear that they believe that at the end of the day Ms O'Rourke - as the Minister responsible for Aer Rianta - can and should direct Aer Rianta to do what the Government wants. If that happens, things will get very interesting.
