Finance to reactivate tourism is not enough.

19-03-2020

An aspect of the negotiations with political parties to secure the final extension to the state of alarm was agreement between Pedro Sánchez and Ciudadanos to make available a total of 2,651 million euros for the tourism industry. Of this figure, 151 million euros will be for investment in transformation and digitalisation. This includes, for instance, a strengthening of efforts to create "smart destinations". The 2,500 million euros are in the form of credit from the Instituto de Crédito Oficial, a state financial entity which falls under the ministry of economic affairs and digital transformation.

The response to this financing has been underwhelming. Gabriel Escarrer, the CEO of Meliá and the president of the Exceltur alliance for tourism excellence, describes the ICO credit as "clearly insufficient". "Our country has lost more than 43,000 million euros of tourism GDP, and everything indicates that when sales and occupancy begin to reactivate in July, these will not reach 50% of what they did in 2019." The 151 million euros "for all the needs of the sector are 0.7% of funds recommended by the European Union".

Escarrer says that the government must adopt the plan put forward by Exceltur for "tourism rebirth". This includes fiscal measures, the extension of ERTE to the end of this year and flexibility in adapting ERTE to business timing.

Carmen Planas, president of the Confederation of Balearic Business Associations, echoes Escarrer's words in saying that the funding is "insufficient for an industry that contributes almost 15% of national GDP".

Jordi Mora of the Pimem federation of small to medium-sized businesses accepts that the investment is significant but adds that it is insufficient to support the entire national tourism sector. Mora points to the fact that France has announced 18,000 million euros of direct aid, loans and tax exemptions.

"It seems that they are completely unaware of the needs of the tourism sector. We do not doubt their intention to guarantee financing and liquidity to tourism businesses and to those in the complementary (non-hotel) sector, but it is not enough."

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