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Support measures for (apart) hotels in the Brussels Capital Region due to Covid-19 health crisis- time to act quickly!

28/10/2020
Support measures for (apart) hotels in the Brussels Capital Region due to Covid-19 health crisis- time to act quickly!
Photo: WStudio/shutterstock.com

Since the outbreak of the COVID-19 health crisis, the hotels and apart hotels in Brussels suffered a serious decrease in business from tourists and business people. Hotels could no longer operate their seminar and leisure centers and they had to close down their bars and restaurants or limit access thereto to hotel guests. These restrictions came on top of the general measures and (travel) restrictions taken in order to try to limit the outbreak of the pandemic. A lot of the hotel operators decided to totally close down operations as a result thereof. The Brussels Government has formalized its support scheme on 26 October 2020 and submissions have to be introduced before 13 November 2020 !

 

What are the conditions to receive the financial aid from the Brussels Region as (apart) hotels ?

The COVID-19 health crisis is now recognised as an exceptional occurrence for (apart) hotel operators by the Government of the Brussels Region and financial aid will be granted under the conditions referred to in point 22 of the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak as issued by the European Commission.

Operators of at least one hotel or aparthotel located in the Brussels Region can request for financial aid, be it that the following conditions have to be met :

  1. the operator needs to have an active registration number and valid town planning and fire safety certificates as at 7 July 2020,
  2. the obligations regarding publication of annual accounts with the National Bank of Belgium needs to be complied with,
  3. the operator satisfies at least two of the following three conditions with regard to financial health (on the basis of the most recent annual accounts filed): a) the equity capital is more than half of the subscribed capital, (b) turnover of 2019 exceeds that of 2018, and (c) the profit for the financial year before tax is positive; for new starters who have only published one or no annual accounts yet, this condition does not apply.
  4. the operator has, at the time of the application for financial aid, no social and tax debts, or the operator does comply with an agreed upon repayment plan;
  5. the operator was not in “difficulty” on 31 December 2019 (ie one of the following situations do qualify as being in difficulty : when more than half of the capital has disappeared, the criteria for collective insolvency proceedings are fulfilled, the operator did receive rescue aid and has not yet reimbursed the loan or terminated the guarantee, or certain ratios are not complied with (debt to equity ratio exceeds 7,5 and EBITDA interest coverage ratio below 1,0));
  6. the operator, as a company, did not yet receive more than EUR 800,000 under point 22 of the abovementioned Temporary Framework, including the premium referred to under this scheme.

 

What if since the outbreak of Covid-19 hotel staff was made redundant ?

One additional exclusion is explicitly provided for by the Brussels Region: operators that did or do make collective redundancies between 23 March 2020 and 31 December 2020 shall be excluded from receiving the aid or, where applicable, shall be required to repay it.

So if hotel employees have been made redundant in the period concerned it needs to be verified if this is part of a collective redundancy or not.

 

What financial aid can a (apart) hotel operator expect ?

The financial aid will consist of a premium of €1,100 per accommodation unit, i.e. a hotel room or any room of a tourist accommodation facility where one or more tourists may stay, of each hotel or aparthotel located in the Brussels Region.

The number of accommodation units is determined on the basis of the form submitted as part of the registration of the hotel or aparthotel.

If the basic capacity of the hotel or aparthotel is 18 or less accommodation units, the financial aid will consist of a fixed amount of €20,000.

Maximum thresholds for financial aid are set as follows : the financial aid shall not exceed EUR 200,000 per hotel or aparthotel and EUR 800,000 per beneficiary/operator (also to remain in order with the abovementioned EU regulations).

 

How and when can operators apply for the financial aid ?

An application form will be made available by the Brussels Regional Administration for Economy and Employment. The application form will  determine the supporting documents that the applicant needs to attach to its application. The applicant has to identify in its submission all aid (to be) received under the Temporary Framework for State aid measures so as to allow the administration to check if the maximum of €800,000 is not exceeded.

The application will need to be submitted prior to 13 November 2020.

Additional information can be requested by the administration concerned and the applicant needs to respond within 10 days. In the absence of such timely response the submission will be refused.

Whether or not the financial aid will be awarded shall be notified to the beneficiary by 31 December 2020 at the latest.

 

Conclusion

From the above it is clear that not all hotels or apart hotels will be able to benefit from this aid measure due to the stringent conditions.

Applications need to be filed before 13 November 2020 !

Should you have any other questions regarding this topic, please contact Lieven Peeters.

Contact

Lieven Peeters

Partner

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