Norway to support its tourism industry with up to 1 billion kroner of crisis funding

Iselin Nybø - Linda Hofstad HellelandPhoto: Heiko Junge / NTB

A broad and general support scheme for companies hit by the coronavirus crisis is now being replaced by a narrower and more targeted support scheme.

The money will be paid out in 2021.

“The old scheme applies to the business community in general. The new one will apply to tourism and the industries related to it,” Minister of Trade and Industry Iselin Nybø (V) told news bureau NTB.

On Tuesday, the Norwegian government sat down with the parties involved to discuss the “limits and delimitations” in the scheme, she added.

On Monday, Nybø and Minister of Districts Linda Hofstad Helleland (H) presented a new compensation scheme of up to NOK 1 billion for tourism companies.

The scheme will be based on the regulations for the general support scheme for the business community, which was discontinued on September 1.

The old scheme originally had a budget of NOK 50 billion.

So far, NOK 6 billion has been paid out.

In place during October

The new scheme will apply from September to December of 2020.

The state will cover a share of fixed and unavoidable expenses in tourism companies with a large drop in turnover.

The scheme is aimed at industry segments such as hotels, accommodation, catering, and parts of the industries for passenger transport.

Nybø expects the scheme to be in place during October.

“When we move from an automated scheme administered by the Tax Administration to a more sophisticated scheme, there must be manual processing. The payments will not take place until the beginning of 2021,” Nybø warned.

“Many are now facing a very uncertain autumn and winter. A lot of time will pass before the next summer holiday, and the business community has postponed many seminars and kickoffs. The Christmas-related season is also uncertain,” Nybø noted.

Unprofitable companies

Critics fear that the government will keep companies that would go bankrupt in a normal situation alive with such schemes.

“We are concerned that we will keep alive companies that should not stay active,” Nybø added.

Earlier this autumn, she announced that the crisis in the tourism industry “is the new normal,” and that Norway “must find out how to live with it.”

Kristin Krohn Devold at NHO Reiseliv emphasized that – as long as the pandemic lasts and parts of society remain closed – the industry must receive help to survive.

“Fortunately, the government has listened to (the) tourism (industry), the most important thing now is to cover the fixed costs, to keep companies and jobs alive until next summer,” she said.

However, the Enterprise Federation of Norway’s (Virke) manager Ivar Horneland Kristiansen fears the package is not big enough.

“According to our analyzes, tourism alone will have a fall in turnover of NOK 80-90 billion in 2020. Therefore, one billion will not take us to the finish line,” he said.

New restructuring package

The government is also proposing an additional NOK 250 million for restructuring, to be distributed via Innovation Norway.

To qualify for support, companies must prove more than a 30% drop in turnover in the last two months compared with the previous year.

The government also wants a subsidy scheme of NOK 200 million via which the municipalities that had to implement extra local infection measures due to major coronavirus outbreaks can compensate companies that have been significantly affected.

“When the vaccines are in place and the borders open, Norway will be the number one country for foreign tourists, because we managed to use the crisis to build a more dynamic tourism (industry), Helleland pointed out.

© NTB Scanpix / #Norway Today

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