The European Commission has approved Italy’s €698 million aid package within the country’s Recovery and Resilience Plan.

The aim of the funding is to alleviate the impact of the Covid crisis on businesses within the tourism sector.

Tourism makes up 6% of Italy’s GDP, equating to around €93 billion, as per the Italian National Institute of Statistics (Istat). However, as a result of the pandemic, a large number of tour operators, travel agencies and hotels were faced with urgent liquidity requirements.

“Companies active in the tourism sector have seen their revenues significantly decline because of the coronavirus outbreak and the restrictive measures in place. This €698 million Italian scheme will enable Italy to support these companies by helping them meet their liquidity needs and ensuring the continuity of their activities.  We continue to work in close cooperation with Member States to find workable solutions to mitigate the economic impact of the coronavirus pandemic, in line with EU rules,” Executive Vice-President Margrethe Vestager in charge of competition policy, stated.

The aid will be distributed via direct grants and tax credits for tourism companies, whereas travel agencies and tour operators will receive credits.

“For tourism companies, the measure is aimed at covering part of the costs for the improvement of structures and facilities and for energy efficiency. The eligible beneficiaries will be entitled to receive an aid amount covering up to 50% of the eligible costs, within a maximum ceiling of €100,000 per company,” says the European Commission.

“For travel agencies and tour operators, the measure is aimed at covering part of the costs related to renovations and digital development activities. The eligible beneficiaries will be entitled to receive aid in the form of a tax credit covering up to 50% of the eligible costs, within a maximum ceiling of €25,000 per beneficiary,” the EC added.

Still, labour shortages could impact the continuity of many tourism activities this summer season, says a Euractiv report. Hotels and restaurants will need between 300,000 and 500,000 members of staff, according to estimates by the tourism ministry.

Italian Minister of Tourism, Massimo Garavaglia has suggested opening the doors to foreign workers.