State aid to tourism: Overview of the rules Conference on State aid Law Brno, 18 May 2017 Disclaimer: the views expressed are those of the speaker only and cannot be regarded as stating an official position of the European Commission Graça da Costa Senior Expert State aid strategy DG Competition

Index Introduction Public financing of tourism Case experience Instances where State aid is not involved Instances where there is State aid but there is no need to notify Case experience

Introduction

Multiple activities-multiple rules… "Tourism" is travel for pleasure or business; also the theory and practice of touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tours" Multiple directly/indirectly related industries and activities: accommodation (hotels resorts); travel agency; reservation services; tourism promotion; entertainment activities (parks); cultural activities (museums, theatres); sports activities; transport activities (air transport, cruises)…. Not possible to have one single set of State aid rules …but many possibilities of public financing in compliance with the rules Cathedral of St. Peter and St. Paul in Brno. Source: Flickr

Instances where there is no State aid 1. No economic activity 2. No effect on trade between Member States 3. No advantage Source: Flickr

1. No economic activity Notion of economic activity: offering goods or services on the market If activities not carried out against remuneration : no economic activity – no aid If the State fulfils a genuine public task and responsibility: no economic activity– no aid. Source: Flickr

2. No economic activity- examples Non-income generating tourism facilities, : information centres and other welcoming facilities, public parks, shelters and observation points, picnic areas to be used free of charge, nature paths including signage, piers, observation posts… Distribution of touristic information materials free of charge: brochures, maps, train and bus timetables Free visits or tours General destination marketing: image promotion of a region (tv spot, website) …but should not include advertising or booking facilities that are typically economic (e.g identifying specific beneficiaries) Culture, heritage conservation and nature conservation: if not organized in a commercial way (e.g. free of charge or not primarily financed by user fees Source: Flickr

3. No economic activity- examples (cont) If the principle of ancillary activity applies (article 207 of NOA) or if public financing provided to customary amenities (coffee shops, souvenir shops) of activities almost exclusively used for non-economic activity = overall activity non-economic. Source: Flickr

No effect on trade between Member States Case-by-case analysis: - limited area - unlikely to attract customers from another Member State (predominance of local users; similar offers in other Member States) - the aid is unlikely to have more than a marginal effect on the conditions of cross-border investments or establishment (e.g. for linguistic reasons) Support granted under de minimis Regulation (not more than EUR 200 000 to a single undertaking over 3 years) Source: Flickr

No advantage Investments in compliance with the Market Economy Investor Principle(MEIP) - pari passu with commercial operators - (ex-ante) business plan showing adequate return on investment. Ex: the public authority co-invests under the same terms and conditions with a private operator in an accommodation facility or holiday booking platform Entrustment of SGEI in line with Altmark criteria: Ex: support for accommodation facilities aimed at hosting tourists with modest income ?

Instances where there is State aid but no need to notify If measure complying with GBER, such as: Investment aid for local infrastructures up to EUR 10 million per project (Art.56) – provided all conditions are complied with, no additional "local" requirement Aid for sport and multifunctional recreational infrastructures (Art 55) .Ex. SPA centre Aid to SMEs (Arts 17-19) Ex. for participation in fairs Aid for cultural activities (investment aid + operating aid ) Regional aid (Art. 14), Training aid (art 31) If service qualifies as SGEI and measure can comply with SGEI Decision – state aid for the compensation of that SGEI up to EUR 15 million per year

Case practice GBER schemes Regional aid Treaty

Thank you! Graça da Costa Senior Expert State aid strategy DG Competition