EU grants for small businesses—Hotels can digitalise now
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 communication—even beyond the stay. The German government recognises the importance of offering financial aid to digitalise hotels in Germany. Read below for more on EU grants for small businesses.
The “Digital Now – Investment Support for SMEs” program will start on September 7th, 2020. The goal is to encourage small and medium-sized enterprises such as hotels to invest more in digital technologies. Additionally, these businesses can invest in training their employees on digital topics. By providing EU grants for small businesses of up to 50,000 euros, the Federal Ministry of Economics and Energy in Germany (BMWi) wants to further promote digital change. This will 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, they can stay ahead of the competition in the long run. Below we have summarised the most important information on the support program for financial aid digitalise hotels.
Which hotels can apply for the financial aid?
The small and medium-sized hotels that can use the support program “Digital Now – Investment Support for SMEs” have
- between 3 and 499 employees
- a permanent establishment or branch in Germany
- 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 following two modules comprise the program:
- 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. Consider, for example, 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. It includes further training in the field of digital technologies, IT security, and data protection, and basic digital skills.
You can take 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 if they have between:
- 3 and 50 employees: 50% subsidy (+ possible bonus percentage points)
- 51 and 250 employees: 45 % promotion (+ possible bonus percentage points)
- 251 and 499 employees: 40 % promotion (+ possible bonus percentage points)
The funding rate may increase by a few percentage points due to the following: 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. If you submit your application from July 1st, 2021, and onwards, you’ll find the above funding rates reduced by 10%.
Which conditions must be met for financial aid digitalise hotels?
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 you cannot start the project at the time of the grant approval. Additionally, once the program approves your grant, you must implement the project within twelve months. The company must also be able to prove that the funds have been used.
The Federal Ministry of Economics and Energy has also prepared a comprehensive overview answering the most important questions. Please follow this link (in German) for more on EU grants for small businesses.