European Union funds for the tourism sector: how to apply for them.

Digitalisation of the entire travel cycle: the funds' priority

Digitalisation is one of the major challenges in the tourism industry that the European Union funds are looking to address and covers much of the value chain. It includes technological infrastructure, process automation and staff training, but, above all, is a new way of interacting with users. These users are tourists who are accessing services and products digitally and are looking for a comprehensive experience before, during and after their visit. Digitalisation throughout the travel cycle also helps to build customer loyalty.

The following ideas about digitalisation were put forward during the webinar:

• Tourism is not a very disruptive sector, even from a technological standpoint.
• Users want a digitalised service, as they are becoming more and more used to starting their tourism experience on digital platforms.
• We have been presented with an opportunity to create partnerships between technology and tourism companies for undertaking the project jointly.

First call for funding applications, with 25 million euros available

Since January 2022, we have had the fundamental information about the first call for applications for funding to support digitalising tourism companies, which is financed by European Union funds.

The funding, which will be awarded on a competitive basis, is aimed at “last mile” projects with budgets of between 300,000 and 5 million euros. The main requirement is that applicants are groups of companies.

• Projects that incorporate emerging technologies, such as the Internet of Things, 5G, Big Data, cybersecurity and mobile apps and that help to make the tourism sector more competitive. There are 20 million euros available for projects with budgets of between 500,000 and 5 million euros.
• Projects involving rolling out and adopting less disruptive and simpler new technologies. There are 5 million euros available for projects of this type with budgets of between 300,000 and 750,000 euros.

The subsidies will cover up to 50% of the total project budget for SMEs and up to 15% of the total project budget for large companies.

The digital kit for SMEs and self-employed individuals

The digital kit plan, with a fund of 3.067 billion euros, is not specifically aimed at the sector, but could be a good option for small and medium-sized tourism companies.

• Companies with 10 to 49 employees: a digital bonus of 12,000 euros.
• Small businesses or micro-businesses, from 3 to 9 employees: a digital bonus of 6,000 euros.
• Companies and self-employed individuals with one or two employees: a digital bonus of 2,000 euros.

This bonus can only be spent with authorised supplier companies, called Digitalising Agents, for very specific needs, such as revamping your website, improving SEO positioning, creating an eCommerce business, managing social media or digitalising processes within the company.

Tourism Sustainability Plan: The second call for funding applications will come in March

The tourism sustainability plans, known as PDSTs, launched in 2021 with an initial 660 million euros allocated to Autonomous Communities. 506 projects were submitted and 169 of them were eventually selected. The second phase will be announced in March, with 720 million euros available.

The 169 projects selected during the first phase in 2021 focus on initiatives that have a significant impact on the tourism industry and were submitted by operators, city councils, associations of townships, autonomous communities and consortia. They range from constructing a charging station in Plaza de Canalejas, in Madrid, to a plastic-reduction project targeting the tourism industry in Valencia or wine tourism initiatives in La Rioja.

Tourism Competitiveness Fund

The call for applications was published in December 2021 and includes loans for projects which work both to roll out digitalisation initiatives for tourist destinations and innovate and modernise services.

It addition, projects subsidised by other funds can also be can be co-financed using this fund.

The loans will have repayment periods, deferral periods and low-interest rates. In two streams:

• Digitalisation: mobile apps, use of Big Data, e-commerce, digital marketing strategies, online branding, augmented reality and social media. And, in general, everything related to digital tourism.
• Innovation and modernisation: construction and renovation of tourism infrastructure, as well as research projects. With a special focus on accessibility, energy efficiency and the circular economy (such as renewable energies, waste management, water reuse, emissions reduction, thermal insulation or electric mobility).

The other European Union funds available to the tourism sector

The tourism sector is very transversal and is eligible not only to apply for funds created ad hoc specifically for the sector, but also to respond to general calls for funding applications for digitalisation, building refurbishment or solar self-consumption:

• The MOVES III Plan and the MOVES Fleet Plan for supporting purchases of electric vehicles and the installation of recharging points.
• The Building Energy Refurbishment Plan (PREE).
• The Renewable energy, Green Hydrogen and Storage Strategic Project for Economic Recovery and Transformation (PERTE), with plans already underway for energy communities and funding for solar self-consumption .

Creating partnerships and synergies with local authorities: you cannot go it alone

One of the key aspects of the funds is identifying projects which have an impact across a number of verticals. Incorporating private companies' concerns into the administrative-body roadmap. What's more, if we also focus on its impact on civil society, the business community and university and technology hub involvement, these funds will definitely deliver effective support.

Local authorities play an important role in NextGen funds. One of the first steps is getting a grasp of the operations and strategy of the municipality where we are going to work.

• The government is very keen for organisations to submit projects to it.
• City councils are putting together proposals for raising funds.
• Companies must cross-reference their roadmap (such as sustainability, efficiency and digitalisation) with the local authority's roadmap.

A sector that has not received subsidies until now and needs to learn how to apply for them

There is a lack of knowledge in the sector about how this funding system works and how European Union projects are managed. Until now, the tourism sector had never needed these funds.

• It is a very fragmented and granular sector that is not used to working together and to sharing data and experiences. However, this is the ethos behind, for example, smart destination networks and platforms.
• This collaborative approach creates added value for the proposals. While there will be announcements for individual funding, many of the calls for funding applications will be aimed at consortia, which will require greater management and coordination skills.
• It is important to establish how these private-private or public-private consortia are governed.

The main criticisms and concerns from the tourism sector

• A specific PERTE for tourism, as requested by the sector, was not ultimately approved.
• The language and bureaucratic constraints can be a barrier to entry.
• The rules for projects can discourage large companies, as a small hotel chain with more than 250 employees may be classified as large and may only be eligible for funding worth up to 15% of its project budget.
• The concept of joint liability for companies and groups taking part may disincentivise them.
• The temporary windows for submitting projects are very short and some calls for applications were not covered in 2021 as a result.
• The budget thresholds for the grants, with a minimum of 300,000 or 500,000 euros, can be too much for small businesses .
• The calls for applications that businesses must respond to in a number of several Autonomous Communities may be of interest for projects such as the Camino de Santiago, but do leave out many other local projects or special cases, such as the islands.
• The majority of the European Union funds will be allocated to public authorities (city halls, associations of townships and Autonomous Communities) and leaves out the private sector.

Can you submit the same project for a number of calls for applications?

Yes, you can actually obtain this funding, even if the process is very challenging. It's a case of comparing the success rates between one call for funding applications and another and, once the funding has been awarded, choose one or another while the decision is not final.

Before any doubts of this type arise, we would recommend analysing and deciding upon which call for funding applications is best for each project. Alternatively, you can phase the projects and respond to different calls for funding applications at each milestone. However, you can never fund the same cost through a number of calls for applications.

Conclusion if we have a plan, we will get European Union funding

"Just when we thought that we had all the answers, they changed the questions". Mario Benedetti's phrase could apply to how we approach opportunities to obtain European Union funding. We need to change the standard question that we ask ourselves when a subsidy comes up. It is not about figuring out how we can obtain the subsidy, but instead is about thinking about what exactly our strategic plan is for our company. And then, with that ambition, we need to create a roadmap that will align perfectly with the European Union funds.