Nama to be 'key player' in hotel sector

THE NATIONAL Asset Management Agency (Nama) will become a “key player” in the hotel sector in Ireland, according to Minister for Tourism Mary Hanafin, who said the oversupply of hotels requires a “market led response”.

She told the Dáil that 2010 was likely to be another tough year for the sector “with further adjustments taking place as the market responds to excess room supply”. This process will gain “further momentum” in coming months as “more banks seek to clean up their balance sheets and dispose of underperforming loans”.

Speaking during a debate on a Labour Party Private Member’s motion on developing tourism, Ms Hanafin said this was necessary ‘‘to restore some level of equilibrium in the hotel market”. She said “Nama will become a key player in the hotel sector as more hotel-related loans migrate to the agency.” She would be “encouraging Nama to take a strategic approach to the sector, to build up their expertise in this area and to consult sectoral interests including the Irish Hotels Federation”.

The Minister defended the Government’s response to the downturn in the tourism industry and highlighted some initiatives including the scheme for free rail travel for older tourists. She said more than 4,500 golden trekker passes had been issued to overseas visitors.

Ms Hanafin said the Government recognised tourism as a critical, labour intensive sector and said that while other departments suffered major cutbacks overall tourism funding rose by 3 per cent to €153 million, demonstrating the Government’s “commitment” to the sector.

Labour tourism spokeswoman Mary Upton, however, said the Government was not “taking steps to protect the industry from external problems”. She had served as spokeswoman for three years and having “marked” three different ministers “it is clear that the Government is of a mind that this portfolio is the last staging post before the exit from cabinet”.

“Despite hopes for a recovery from tourism’s annus horribilis 2009, this year, 2010 has proven to be even worse than 2009 with numbers collapsing further,” she said. “The response of the Fianna Fál/Green Party Government? Impose an Air Travel Tax.”

Fine Gael spokeswoman Olivia Mitchell said the tax was “little short of a catastrophe”.

She said it might bring in €100 million in tax but was costing hundreds of jobs. She also said it was vital that Nama did not “nurse along unsustainable hotels”.