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Factsheet for measure SK-2020-48/2016 Updated – measures in Slovakia

Extension of support for the tourism and gastronomy sector

Rozšírenie podpory pre sektor cestovného ruchu a gastrosektor

Country Slovakia , applies nationwide
Time period Temporary, 28 November 2020 – 31 December 2022
Context COVID-19
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Rastislav Bednarik (IVPR)
Measure added 04 October 2021 (updated 07 February 2022)

Background information

The government's measures to support the tourism and gastronomy sector adopted in October 2020, proved to be insufficient. The Association of Hotels and Restaurants of Slovakia (AHRS) put long-term attention to the critical situation in the tourism segment, which is one of the sectors most affected by the pandemic. According to its October 2020 survey, up to 79% of city hotels and guesthouses in July 2020 and up to 81% in August 2020 had a decrease in sales of more than 40% compared to the same period in 2019.

In April 2021, the AHRS stated that the targeted aid provided in December 2020, failed to assist all eligible applicants and was not enough to reach the aimed support by the end of 2020 under the minimis scheme, the support was limited to €200,000, According to the AHRS, the first €100 million exhausted very quickly.

As the sector faced a wave of bankruptcies, layoffs and secondary insolvency of many suppliers, the government increased the support. After approval of the so-called large aid scheme by the European Commission, the government has prepared co-financing of compensation for companies in a higher amount than €200,000 for one company.

Content of measure

The government prepared several legislative measures to support tourism. The first one, on 28 November 2020 of November 28, 2020 (see reported in case SK-2020-48/1598)(https://static.eurofound.europa.eu/covid19db/cases/SK-2020-48_1598). The amendment to Act no. 91/2010 on the promotion of tourism.

In 2021, the government has twice increased aid to the tourism and gastronomy sector is the Ministry of Transport and Construction of the Slovak Republic (MDV SR) provides the aid from 1 April 2020 to 31 March 2021. The MDV SR has prepared a Large State Aid Scheme. The beneficiaries are enterprises which carry out economic activities in the tourism and gastronomy sectors. As in the case of the de minimis aid scheme, the basic precondition for obtaining state aid is a decrease in sales by 40% compared to the same period in 2019.

Further preconditions are that the company does not apply for or draw European Union funds or other funds for the same purpose, it is not subject to execution or bankruptcy proceedings and is not in bankruptcy or restructuring. It is also checked whether the applicant has not violated the ban on illegal employment in the previous two years. Conditions for receiving financial assistance in a maximum amount of €1 million are therefore almost the same, but the process is more administratively demanding (e.g. an auditor is required).

The amount of the aid will not exceed 10% of the nominal decrease in net turnover. The aid intensity may not exceed 70% of the uncovered fixed costs. In case of micro and small enterprises (according to Annex I to Regulation (EU) No 651/2014 as amended), the aid intensity may not exceed 90% of the uncovered fixed costs, up to a maximum of €10 million.

Updates

The following updates to this measure have been made after it came into effect.

18 December 2021

Due to the ongoing pandemic caused by the communicable disease COVID-19 and its negative impact on the economic activity of tourism businesses, the government has extended the period in which state aid can be provided until 31 December 2022.

Use of measure

According to the MDV SR, for the period from April to October 2020, eligible applicants applied for financial contributions in the total amount of approximately €64 million. The monthly average of applications was €3,443 per subject. According to the MDV SR, the total amount of financial support to companies in the tourism sector through the de minimis and state aid schemes will reach €259.25 million. In 2021, the budget for state aid in the field of tourism is adjusted in the amount of €232.9 million, while the drawdown is expected as of 31 December 2021 in the amount of €131.3 million, which represents the balance of €101.6 million. The approved expenditure limit of the Ministry of Transport and Construction of the the Slovak Republic chapter determines the current expenditure on state aid in the field of tourism in the amount of €20 million for 2022.

Target groups

Workers Businesses Citizens
Does not apply to workers Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
National government
Company / Companies
European Funds
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement Consulted
Form Not applicable Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

  • Only employers' organisations
  • Main level of involvement: Sectoral or branch level

Involvement

The government consulted with employers' organizations in the tourism and gastronomy sectors. Trade unionists were not involved in either the preparation of the measures or the implementation of the measures.

Views and reactions

Employers' organizations continue to point to the need for further assistance due to anti-pandemic regulations.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      I - Accommodation And Food Service Activities I55 Accommodation
      I56 Food and beverage service activities

This case is not occupation-specific.

Sources

  • 04 November 2020: Prieskum AHRS ubytovacie a stravovacie zariadenia počas koronakrízy (istroanalytica.sk)
  • 12 May 2021: Schema štátnej pomoci pre turizmus (www.mindop.sk)
  • 18 December 2021: Act no. 501/2021 Coll., Amending Act no. 91/2010 on the promotion of tourism (www.slov-lex.sk)

Citation

Eurofound (2021), Extension of support for the tourism and gastronomy sector, measure SK-2020-48/2016 (measures in Slovakia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/SK-2020-48_2016.html

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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.