Government provides up to 5 million euros in subsidies for construction of luxury hotels under international brands

The Serbian government has adopted the Regulation on the Conditions, Manner of Allocation and Use of Incentive Funds for Improving the Quality of Hotel Accommodation Services, which introduces a new model of state support for hotels operating under international brands.

The aim of the regulation is to strengthen the competitiveness of the Serbian hotel industry, attract more tourists, extend the tourist season and increase tourism revenues, and the measures are implemented by the Ministry of Tourism.

The incentive funds are granted non-refundable, up to the full amount of the investment project, but not more than 5 million euros per project, and are paid in one installment. The purpose of the funds includes investments in the construction and equipping of hotels, the introduction of a hotel brand, digital systems, employee training, as well as franchise and management costs.

Companies, other legal entities and entrepreneurs engaged in hospitality activities are entitled to incentives, provided that they conclude a franchise agreement with an international hotel chain for a hotel of at least four stars. The franchise agreement must be concluded for a minimum of ten years, and includes the use of the brand, access to global reservation systems and standardized operating procedures.

Incentives are also available for new, not yet built hotel facilities, with extended deadlines for obtaining a categorization decision.

Beneficiaries of the funds are obliged to maintain the hotel in the category of at least four stars for a period of five years from the opening, as well as to regularly submit audit reports on the implementation of the investment. In case of non-compliance with the contract, the funds will be returned with interest.

The funds will be allocated through a public call, and when evaluating the projects, the references of the investor and the hotel chain, the financial viability of the project, the contribution to local employment and compliance with strategic documents for tourism development will be assessed.

I. Z.

Vlada Republike Srbije

Government of Serbia

Regulation on the Conditions Manner of Allocation and Use of Incentive Funds for Improving the Quality of Hotel Accommodation Services