The seaside resort scheme which expired a year ago failed in the achievement of a key tourism objective by not attracting overseas tourists, a Department of Tourism report has concluded.
The scheme ran for four and a half years and encompassed 15 resorts including Kilkee and Lahinch in Co Clare. But the review states the scheme is now out of line with best practice given that the new Small Town Renewal Scheme emphasises "the need for an integrated and planned approach to development".
It questions the long-term value of the scheme to local economies and notes that it has been divisive for communities, with traders and other beneficiaries in the "pro lobby" and "the anti lobby comprising those concerned about perceived damage being done to the scale and character of the resorts".
"400 new self-catering units have clearly had a very visible impact on a town the size of Kilkee," the review states.
A traditional Victorian resort with a population of 1,300, it is in the top four of resorts for the number of holiday homes it has.
Courtown, Co Wexford, had 890 units built, followed by Youghal, Co Cork, with 779 units, and Bundoran, Co Donegal, with 652 units.
A total of 5,295 units were built at an average cost of £100,000 each, amounting to an estimated total investment of £529.5 million.
This comprised 80 per cent of the expenditure under the scheme. The remainder was spent on building 123 B&Bs, 55 hotels, 12 youth hostels and 10 caravan and campsites.
The estimated cost to the Exchequer, in tax forgone, was between £250 million and £300 million. "The majority of investors have been high-income, non-local individuals, with significantly less investment by companies. "This tends to have the effect of increasing the tax forgone cost to the Exchequer," the report states.
It also stated that "it encourages intensive development in areas whose main selling point for tourists, especially overseas tourists, is their wilderness category". The legacy of the scheme was criticised by the chief executive of Bord Failte, Mr John Dully, at a conference in Limerick this week. He said the scheme had been undermined by lax planning laws and their inconsistent application.
At board level, he said, the principled position had been taken that if a development was "manifestly contrary to high environmental standards", Bord Failte would object. "I would like to apply a lot more resources to minding the environment," he said.
Bord Failte, Shannon Development and the Revenue Commissioners were represented on the review group, along with officials from the Tourism, Finance and Environment Departments.
The review noted that "some planning authorities appeared to cope better than others" with the development pressure. At this week's conference, new figures compiled by the MRBI for Shannon Development were revealed, showing that a majority of self-caterers and B&B owners in the mid-west believe that the season in 2000 was worse than in 1999 for domestic tourists, with just 16 per cent believing business volume was up.
In contrast, 67 per cent of hotel owners believed they had a better year, with just 8 per cent saying business was down. Mr John Leonard, Shannon Development's tourism development officer, said it was an issue of supply and demand. "There is an over-supply in certain sectors," he said. With B&Bs, he said there was a need for more marketing and price competitiveness in comparison with new budget accommodation.
"The other issue is that more people are travelling abroad, going for longer-stay breaks, who would have traditionally fed the self-catering section and the B&Bs," he said.
The Department's report says there is strong evidence a significant number of the new self-catering units are not genuinely on the market, as required by the scheme.
"The increase in stock which is registered or listed under the Tourist Traffic Acts and marketed through the guides and the Tourist Information Offices is less than would be expected."
But the regeneration of the resorts has occurred due in part to the scheme and it "has probably assisted in the achievement of regional spread in domestic tourism terms, and the wider dispersal of the spin-off effects of economic growth".