Comprehensive aid plan needed for Spain's tourism

The president of the CEOE, Antonio Garamendi, said on Thursday that the country's tourism industry needs ERTE to be extended for a few more months. He stressed that sectors which are directly and indirectly dependent on tourism should be treated the same. They are all "having a hard time and need immediate help".

Garamendi emphasised that tackling the crisis facing the tourism industry is not just about ERTEs or credit from the government's ICO Instituto de Crédito Oficial. "There has to be a comprehensive aid plan."

The CEOE is proposing measures to facilitate liquidity, boost demand and reduce operating costs. Liquidity, the confederation says, requires maintaining and even extending debt deferrals with the tax agency and social security and continuing with ICO credit guarantees. With regard to operating costs, ERTE should be maintained until there is a recovery in demand, while there should also be greater flexibility in negotiating rents. To boost demand, the CEOE wants to see a marketing campaign that will restore Spain's image; health measures to generate confidence among tourists; the reestablishment of air connectivity; the facilitation of travel medical insurance for foreign tourists; and a reduction in the rate of IVA (VAT) as it applies to the tourism sector from ten per cent to seven per cent for the rest of this year and for 2021.

The report from the CEOE points to VAT reductions elsewhere. In the UK, a six-month cut from 20% to five per cent for tourism will result in the injection of 4,100 million pounds (4,600 million euros), an amount which is higher than the reactivation plan provision for the entire tourism sector in Spain.

Further proposals include the temporary suspension of tourist taxes, town halls' tax measures, and a campaign that highlights Spanish hotel companies' efforts and investments in guaranteeing safety in their establishments.

Garamendi insisted that the commitment to quality is no longer enough. "It is necessary to incorporate essential elements such as health and personal safety, training, sustainability and digitalisation."

The president of the CEOE's tourism council, Marta Blanco, added that the confederation is prepared to work with the Spanish government in designing an urgent aid plan and a strategy for tourism to regain its role.