January 26, 2021

Madrid hoteliers demand less tax burden and the extension of ERTE until December 2021


MADRID

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The Madrid Hotel Business Association (AEHM) has requested this Thursday a Rescue Plan for the Hotel Sector to guarantee the survival of the sector, maintain jobs and enable recovery for next year. The hoteliers of Madrid affirm that, if this plan is not implemented, “the last opportunity to offer a lifeline to a sector that has been dying since March will be lost.” Likewise, they criticize the measures of the public administrations that have been implemented so far, considering that have not been proportional to the seriousness of the situation derived from this second wave of the health crisis. Along these lines, the AEHM notes that the occupancy of its establishments is still below 15% and they argue that many of the hotels that have been able to reopen after the first wave have been forced to close again later due to the lack of constant demand .

AEHM spokespersons insist that the tourism sector has been one of the main engines in the economic recovery of the 2009 crisis – it contributed 14% of Spanish GDP and generated 15% of the jobs created after the previous crisis – and therefore, they point out that now it should be a key piece in the reconstruction of the national economy after the Covid-19 pandemic. “However, the current reality of the sector is far from being that of just a year ago since, according to Exceltur, the losses could add up to more than 106,000 million euros and its survival is in question,” they warn.

«It is worth betting on the tourism and hotel sector in Madrid, but urgent measures are needed by the administrations such as the reduction of the tax burden, direct support measures or the decisive and clear investment in the promotion of Madrid as a safe destination and competitive. Our situation requires the adoption of concrete and coordinated measures by the administrations to contribute as soon as possible to the creation of wealth and employment, ”said the AEHM secretary general, Mar de Miguel.

Faced with this situation, the rescue plan presented today is structured based on a series of concrete measures that public administrations should adopt in the short and medium term. Along these lines, Madrid hoteliers ask the central government the 100% reduction of the Tax on Economic Activities and the postponement of the payment of the Corporation Tax with the argument that at this time they cannot generate income and provide their service normally.

Hoteliers argue that the reduction of VAT for the tourism sector to 7% is key to relaunch the activity at the national level and become competitive again. “Other European countries have already implemented it, such as the United Kingdom, which has reduced VAT from 20% to 5% for six months and Germany has done so from 19% to 16%,” they point out from AEHM

On the other hand, hoteliers claim that ERTEs should be extended until December 31, 2021 and they demand that this type of business be exempted from paying Social Security. “It makes no sense that as time passes and the situation gets worse, they are forced to contribute a higher percentage to the quotas of the people who are in ERTE”, they add.

In addition, hoteliers request the Central Executive to allocate 30% of European Next Generation funds to help companies in the tourism sector that are about to go bankrupt. They also request the renegotiation of ICO credits so that hotel companies can have access to an extension in maturity of up to three additional years, in addition to a grace period in the main payment of up to 24 months. They also consider it crucial to be able to extend the grace period of the mortgages and allow the adjustment of the contracted conditions, including that their renewal is free.

Tourist vouchers

To promote tourism and passenger mobility nationally and internationally when feasible, direct bonusesThey emphasize that they are another of the measures that have already been implemented in other countries and that the sector demands here. For example, in Italy a bond of up to 500 euros was approved last May for those families with incomes below 40,000 euros to promote national tourism. For its part, France activated checks for citizens with fewer resources and in recognition of professional groups that have fought against the coronavirus.

As for what is the responsibility of the regional government, Madrid hoteliers recall that they had already proposed creating a public-private entity that would work for the promotion and competitiveness of the sector before the pandemic began. “The investment of 30 million euros with the aim of contributing to the reactivation of tourism and repositioning the capital as a safe and competitive destination is urgent and essential for the sector to come back afloat”, they recall. They also insist on the need for regulate housing for tourist use, and that, among other aspects, they can be marketed only if they have a registration number and license.

Finally, Madrid hotels claim the City Council a 100% discount on the Real Estate Tax, 100% on the Tax on Economic Activities and 100% on the Vehicle Pass Rate. “The IBI is the tax that most erodes the liquidity of establishments that, without receiving income, have to comply with this and other fiscal commitments that all administrations require,” they conclude.

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