The hotel industry is asking for 8.5 billion to avoid 100,000 closures

The hospitality sector, through the platform Together with the Hospitality Industry (composed of FIAB, Hostelry of Spain, and AECOC) has asked the autonomous communities and the Minister Reyes Maroto, to urgently approve the Plan to Support the Hospitality Industry announced by the Minister last week. The sector has asked that this plan include direct aid to the sector to the value of $10.5 billion (€8.5 billion). The objective, according to the employers, is to be able to save one million jobs.

The hotel and catering sector in Spain represents 6.2% of the country’s GDP, employs 1.7 million people, and contributes around $20.7 billion (€17.5 billion) to the state coffers, according to data for 2019.

Due to the crisis, it is facing an unprecedented fall since months ago. To date, more than 65,000 hotel and catering businesses have closed, more than 350,000 jobs have disappeared and turnover in the sector has fallen by more than 50% compared to the previous year. To all this must be added the consequences on the more than 30,000 companies associated with the hotel industry, whose combined turnover is about 20% of national GDP.

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Direct aid from the Government is needed

The sector estimates that $10.5 billion (€8.5 billion) would be needed to stop this collapse, which, if no support measures are taken, could lead to the loss of more than 1 million jobs and the disappearance of a third of the hotel establishments (100,000 establishments). “With this amount, a very considerable impact on the public coffers could be prevented in terms of a reduction in the collection of VAT, Income Tax, Special Taxes, Corporate Tax and social security contributions,” assured the Spanish hotel and catering employers.

The hotel and catering establishments reported that “they have been affected by total closures for months and have been making efforts to apply the restrictive health measures without any specific economic support”. All this in spite of the fact that, according to the latest reports from the Ministry of Health, less than 3.3% of the accumulated infections in Spain since May of this year occur in bars and restaurants.

Along with his request, the platform has already sent urgently to the 17 autonomous communities and the Minister of Industry, Trade and Tourism, Reyes Maroto, a battery of proposed measures that include direct aid, tax measures, economic and labor to be approved under the extraordinary conference announced by the minister.

Spain should join other European countries which have already allocated money to the hospitality sector

The aid plans of European countries to support the sectors affected by the crisis already amount to more than $153.8 billion (€130 billion) in total. These aid plans include direct aid to the hospitality sector approved by countries such as Germany or France.

In particular, Germany has already approved direct aid of more than $11.8 billion (€10 billion) in addition to having approved significant reductions in VAT and measures to encourage demand. France is adding to the specific support for the sector and, in addition to approving consumer vouchers, is also going to grant direct aid amounting to 10,000 euros per establishment. This country has also decided to extend the ERTEs until 2022.

However, in addition, countries such as Greece have approved aid to the affected sectors in tourism for an amount six times greater than that dedicated by Spain, in addition to having added a reduction in VAT in the hotel industry and measures to encourage demand.

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(Featured image by JanClaus via Pixabay)

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First published in elEconomista.es, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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