Compensation plan for tourism of up to NOK 1 billion
The government is introducing a compensation plan of up to NOK 1 billion for tourism companies. In addition, they will provide NOK 250 million for restructuring.
On Monday 21 September, the government will present new proposals for relief measures for industries that are acutely affected by the authorities’ corona measures. Tourism is among the industries hardest hit by infection control measures and travel restrictions.
The situation in tourism is very challenging, and it will continue to be so in the future. The government will therefore introduce a new compensation scheme for tourism companies with a large drop in turnover of up to NOK 1 billion, says Minister of Trade and Industry Iselin Nybø.
Separate compensation plan for tourism
The proposed scheme will apply from September to December 2020, and means that the state covers a share of the tourism companies’ fixed, unavoidable expenses. The scheme will apply to the accommodation industry, the catering industry, the mediation industry (such as tour operators and the like), and parts of the industries for passenger transport and experiences. Exhibition and conference organizers are also proposed to be included in the scheme.
Many in the tourism and event market look darkly at the autumn and winter season. No one knows how long the current situation will last. We are doing this now to avoid bankruptcy and maintain activity in particularly hard-hit industries, says Nybø.
The compensation scheme for tourism will be based on regulations from the general compensation scheme for business, which was abolished on 1 September 2020. The Government will enter into a dialogue with the parties in working life to prepare the further details.
Local measures for District Norway
The tourism industry is particularly hard hit by the corona pandemic, not least many tourism players in District Norway. Tourism companies are affected to varying degrees by infection control measures, travel restrictions and declining visitor numbers. I have met many small tourism players around the country and these meetings have made a strong impression. Many fear for their life’s work and for employees to leave. That is why I am glad that we now have a good package in place for the tourism industry, which means that they can keep the wheels turning and be ready when the guests return, says Minister of District and Digitalisation Linda Hofstad Helleland.
The government proposes a separate subsidy scheme of NOK 200 million where municipalities that have had to implement extra local infection control measures due to major outbreaks can compensate companies that have been particularly affected. In addition, NOK 80 million will be used for investment grants under the auspices of Innovation Norway, which will contribute to the necessary restructuring and development of the tourism industry in the districts. NOK 40 million for Siva’s business garden and incubation program will help vulnerable companies across the country to get started again and create more jobs.
Adjustment and new everyday infection
The tourism companies play a major role in many local communities across the country, and they will continue to do so. Now we have to work for adjustment and adapt to a new everyday life of infection, also in tourism, says Nybø.
In addition to a separate compensation scheme, the government proposes to give the tourism industry an additional NOK 250 million for restructuring, which the tourism actors can apply for via Innovation Norway for the rest of the year. This scheme can also be used by trade fair and conference organizers. To qualify for support, companies must show more than a 30 per cent drop in turnover in the last two months compared with the previous year.
Our goal is to continue to have an attractive and sustainable tourism offer when the markets reopen. Norway as a destination should be experienced as safe for both employees and guests, says Nybø.
This spring, a combined loan and grant scheme was established for organizers of package tours managed by Innovation Norway. The scheme will help consumers get refunded canceled trips from the package tour operators, as a result of the corona outbreak. In the first award round, the organizers were awarded up to 20 percent as a grant. In the second round of distribution of grants, the government proposes that the individual organizer will be awarded up to 40 per cent of the reimbursements. An absolute ceiling has been set for the scheme, which means that the individual company will be awarded a maximum of NOK 8 million in the form of grants. So far, the government has granted NOK 93 million in grants and NOK 264 million in loans. Read more about package holidays here.
Facts about a new compensation scheme for tourism companies
- The plan is intended to prevent otherwise viable tourism companies from going bankrupt as a result of the virus outbreak and infection control measures.
- The plan will cover the accommodation industry, the catering industry, the mediation industry (such as tour operators and the like) as well as parts of the industries for passenger transport and experiences. The trade fair and conference organizers are also proposed to be included in the scheme.
- The plan will in principle compensate for the same fixed, unavoidable costs as in the general compensation scheme for business and industry, which was discontinued on 1 September 2020.
- The plan will apply in the period 1 September to 31 December 2020. The support will be paid as a one-off payment in total, at the beginning of 2021.
- The plan must be determined within the framework of the EEA Agreement’s state aid rules and approved by the EFTA Surveillance Authority (ESA).
- Svalbard is covered by the plan.
Facts: Means of adjustment to tourism
- Earlier this year, NOK 250 million was set aside for a subsidy plan for development and restructuring in tourism companies. The plan is managed by Innovation Norway, and the application round ended on 15 September 2020.
- The government now proposes to expand the plan throughout the year, and allocate an additional NOK 250 million for restructuring in the tourism industry.
- The government proposes that the plan should also include trade fair and conference organizers.
- The government is also considering whether start-up companies should be included in the plan.
- The extension of the plan must be determined within the framework of the EEA Agreement’s state aid rules and approved by the EFTA Surveillance Authority (ESA).
- Svalbard is covered by the plan.
Facts: Other important corona support plans for tourism
- Tourism has benefited from both general and industry-specific schemes during the corona crisis. The general compensation scheme for the business community has given the tourism companies around NOK 1.6 billion to cover fixed expenses.
- Other general schemes such as extended redundancy regulations, the wage support scheme for taking redundancies back to work, municipal business funds of NOK 600 million, tax and fee deferrals, and a loan guarantee scheme where the accommodation and catering industry has had about NOK 1 billion in new loans triggered are among most important.
- Industry-specific schemes: Reduced low-rate VAT has been introduced from 12 to 6 per cent until 31 October 2020 for accommodation, passenger transport and certain experience activities (culture and entertainment). The government has also set aside NOK 250 million for statutory maintenance in seasonal businesses such as amusement parks and ski resorts. Separate loans and grants have been given to the package tour operators. In addition, aviation has received loan guarantees from Norwegian airlines and various schemes for maintaining domestic routes. Express buses have been allocated funds, and compensation has been given for canceled cultural events.