State support for hotels and the hotel business in 2023

Many investors have heard about numerous government programs that help hoteliers open new hotels. Yet, for some reason, many of them believe that getting help from the state is difficult, or "it's all corruption", or "everything has already been divided before us". This is not the case! The state is indeed interested in the emergence of more hotels in our country.

There are programs at the federal level, the level of subjects of the Russian Federation and the regional level. There are programs for large hotels and small ones, and for glamping.

There are programs for credit subsidization, reduction of tax rates and even for non-repayable financing of part of the costs for hotels!

Let's take a closer look at the current state support programs for investors in the hotel business.

How to get cheap or free money from the state for your hotel?

The hotel business brings owners good income, but it is important not to let the business drift. To achieve success, constant control over the object, searching for new tools and opportunities for expansion, as well as tracking regulations of legislation and financial support programs are required.

Starting from 2020, the state provides serious support to the hotel business. The coronavirus pandemic shook the financial position of hotels, mini-hotels, and large tourism companies. In 2022, foreign sanctions appeared, which reduced the flow of tourists from the EU and the US to Russia. Although hotel owners are slowly shifting their focus to work with Asian colleagues and tourists, the process of displacement will take a long time.

While collaboration with Asia does not yet bring significant profits, all entities of micro, small and medium-sized tourism business are advised to study new measures aimed at their support, and to take advantage of the benefits and subsidies offered by the Government of the Russian Federation.

How a hotel owner can avoid bankruptcy: brief theses

Hoteliers should not fully rely on the state. Undoubtedly, subsidies and benefits will be useful, but there are a number of measures that a businessman must take himself.

• For stable conduct of business, it is important to properly and timely optimize resources - finance, workforce, software, tools;
• Even during an economic stagnation, the entrepreneur needs to find new growth points and ways to expand the business to new vacated niches.
• Optimize the type of business, in particular, the firm must be officially registered in the Russian Federation, the established restrictions should be applied to all persons with citizenship of unfriendly countries.
• Adjust the type of taxation - entrepreneurs have access to zero VAT rate, special programs of the SME Corporation, but before requesting benefits, you should consult with a lawyer.
• Negotiate with landlords and other authorized persons on reducing rent and obtaining additional benefits or credits during a period when the business is idle or serious building renovation is required.
• Regularly track changes in legislation, ideally work with a professional lawyer. An audit of the niche and the hotel's work should be conducted no less than once every 2-3 months. Also, it is necessary to use automation tools based on modern Russian software for effective hotel management.

Using all of the above methods will allow you to remain competitive and bring the hotel market into greater profit.

My name is Anton Basin,

• I am a Hotel Developer, I create Concepts, design, and open hotels. I have more than 200 projects in my portfolio.
• I've been in the hotel business for 15 years. I worked in the Azimut hotel chain as the Deputy General Manager for development, built and opened the famous Lepota hotel near Moscow.
• I created the Association of Country Hotels, where I am currently the President.
• I am the Owner of BASINN Hotel Development Company.

List of types of state support for hoteliers in 2023

The listed measures of support for hotels apply to all entities that operate officially in Russia. Individual entrepreneurs or LLCs must be registered in the Unified State Register of Legal Entities and regularly submit tax returns in the usual way.

Zeroing the VAT rate

The tax regulation has been in effect since mid-2022. It applies only to those hotels and entities that accommodate guests and tourists, which were opened before January 1, 2022. The benefit works for five years, its end date is June 30, 2027. Experts allow the extension of this economic regime, but there are no official statements yet and the situation will depend on further development of foreign policy events.

Introduction of credit holidays for SME entities

Leading banking structures of the Russian Federation and their partners have decided to issue credit holidays, that is, to freeze payments, to a number of entrepreneurs engaged in the tourism and hotel business. Conditions:

• The maximum freeze period does not exceed 6 months;
• The activity of companies with OKVED classifiers 55, 79, 93 falls under the jurisdiction of the benefit;
• To receive a holiday, it is important that the loan agreement was concluded before March 1, 2022.

If credit holidays are not available for a specific entrepreneur, he can turn to the creditor for refinancing or restructuring the loan on general terms.

Compensation for income not received by the hotel

At the beginning of 2021, the Government of the Russian Federation put forward Resolution No. 141, on the basis of which, the hotel owner can receive financial compensation for the period when the reconstruction of the premises or its construction was being carried out. Subsidy conditions:

• Financial support is only available to those whose construction or renovation project is focused, detailed and contains specific deadlines for completion;
• Compensation is made by maximizing the reduction of the interest rate on the loan requested by the businessman for the execution of reconstruction tasks;
• The minimum loan amount is equal to 100 million rubles, the maximum is 70 billion rubles. The interest rate ranges from 3-5% per annum.

Compensation is available to hotels of 3 stars and above with an area of not less than 5 thousand square meters and the number of rooms in the room fund from 120.

Help under the general SME support program

As part of the development of the tourism industry sector, the state can reimburse part of the financial costs for the construction, modernization and commissioning of hotels and hotels. Who can get it:

• Only companies operating in St. Petersburg and the Leningrad region;
• Companies that are registered in the branches of the Federal Tax Service in the Leningrad region;
• Hotels, hostels, hotels, as well as companies that build tourist industry facilities near guest accommodation sites.

The program allows for the reimbursement of up to 80% of development costs over the past two years, including the current one. The maximum amount of the subsidy is 1.5 million rubles.

Additional measures

The Government of the Russian Federation also offers accelerated reimbursement of the VAT rate, debt restructuring and a ban on bankruptcy, extension of the zero taxation regime.

• Now 0% VAT is available for all regions, as well as for new individual entrepreneurs who have chosen to pay taxes under the PSN or USN scheme;
• A similar rate is available for all existing individual entrepreneurs and LLCs engaged in the industry of providing temporary accommodation for guests and tourists;
• When filing for bankruptcy, a loan freeze and debt restructuring are available so that the hotelier can continue to work;
• All organizational and legal forms of the hotel business can receive VAT reimbursement without providing guarantors or a bank guarantee.

The state continues to increase measures to prevent bankruptcy and slow down the development of the hotel business. In 2023, it is planned to attract a flow of tourists from Asian countries, which will allow restoring the internal economy of the sector and reducing the expenditure of money for support from the budget.