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Financial Aid to Digitalise Hotels in Germany: Digital Now

August, 2020

More and more companies are realizing that digital technologies are a determining factor for their own competitiveness and future viability. The hospitality industry is no exception with digitalisation becoming standard. Digital expectations of hotels are no longer limited to simply a website and WiFi. Automating processes, such as offering guests a digital pre-check-in, not only frees up staff and saves costs, but also improves guest experience. Digital touchpoints, particularly newsletters and emails, are important tools for guest communicationeven beyond the stay. The German government recognises the importance of offering financial aid to digitalise hotels in Germany.

In order to encourage small and medium-sized enterprises such as hotels to invest more in digital technologies and in training their employees in digital topics, the “Digital Now – Investment Support for SMEs” program will start on September 7th, 2020. By providing financial support of up to 50,000 euros, the Federal Ministry of Economics and Energy in Germany (BMWi) wants to further promote digital change and enable SMEs to take full advantage of their economic potential. 

This is a great opportunity for hotels to improve the digital position of their own company with suitable hardware and software and to stay ahead of the competition in the long term. We have summarised the most important information on the support program for you:

Which hotels can apply for the financial aid?

The support program “Digital Now – Investment Support for SMEs” can be used by small and medium-sized hotels: 

  • with 3 to 499 employees 
  • with permanent establishment or branch in Germany
  • who have appropriate digitalisation plans, such as investments in software/hardware and/or staff training

What will the funding cover?

Small and medium-sized hotels can apply for grants of up to 70% for investments. The program is comprised of the following two modules: 

  • Module 1: Investment in digital technologies. The intent of purchasing new hardware and software is to strengthen the internal and external networking of the company, e.g. cloud applications, use of hardware and IT security and data protection.
  • Module 2: Investments in the qualification of employees. This is aimed at building up the staff’s digital expertise, which is necessary for the company’s digitisation. This includes further training measures in the field of digital technologies, in IT security, and data protection, and/or on basic digital skills.

You can take up only one of the modules or both. If you take both, they do not necessarily have to be related in terms of content.

How much is the funding?

The amount of the subsidy is based on the size of the company. Those who submit their application by June 30th, 2021 can receive the following grants: 

  • Up to 50 employees: 50% subsidy (+ possible bonus percentage points)
  • Up to 250 employees: 45 % promotion (+ possible bonus percentage points)
  • Up to 499 employees: 40 % promotion (+ possible bonus percentage points)

The funding rate may increase by a few percentage points: If your hotel is planning a digitisation project with several companies within a value chain (e.g. with suppliers), the funding rate may increase by 5%. There are also bonus points for investments in IT security (+5 %) and for investments in structurally weak regions (+10 %). Thus, the bonus percentage points can increase the funding rate to up to 70%. The maximum funding amount for an individual company is 50,000  EUR. For applications submitted from July 1st, 2021, and onwards, the above funding rates will be reduced by 10%. 

Which conditions must be met?

Hotels applying for the federal government’s funding program must present a digitisation plan answering specific questions. 

This plan should:

  • Describe the entire digitisation project
  • Explain the type and number of qualification measures
  • Show the current status of digitisation in the company and the goals that are to be achieved with the investment
  • Describe expected improvement. For example, how the hotel’s organization will be made more efficient, how new business opportunities and new business models will develop and/or how this funding will strengthen the hotel’s market position.

Note that the project must not have started at the time of the grant approval, and once it has been approved, it must be implemented within twelve months. Additionally, the company must be able to prove that the funds have been used.

 

To the online application form 

 

The Federal Ministry of Economics and Energy has also prepared a comprehensive overview answering the most important questions. Please follow this link (in German). 

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