KAUNAS SUPPORTS
HOTEL BUSINESS by Rūta Mačytė | ruta.macyte@kaunas.lt
Due to the COVID-19 pandemic, the accommodation business, which is still experiencing difficulties, will receive help of Kaunas city. In order to mitigate the quarantine consequences, Kaunas Council approved a benefit for hotels operating in the city by halving the taxes on real estate, land and rent of state land. It is expected that these measures will help participants in this market segment to recover and reduce their losses.
City supports the businesses
With the approval of Kaunas Council, 50 percent real estate and land tax relief for 2020 will apply to all hotels operating in the city. According to the data of 2019, there were 22 institutions providing accommodation services, but this year their ranks have further expanded.
The tax relief is granted to cultural institutions, leisure, entertainment and other entertainment venues, sports clubs, health service centres and sanatoriums, and other recreational areas – as well as catering institutions, restaurants and bars, shops and supermarkets that had stopped trading during the quarantine.
Pandemic hits the hotel sector hard Restaurants, cafes and other businesses are also returning to normal, on the other hand, hotels are still experiencing consequences of quarantine. The situation is clearly illustrated by the poll tax. Between March and June, 66–98 percent less poll tax was collected than at the same time last year. Such significant decrease reveals that the pandemic has hit the hotel sector hard, with paralyzed tourism, cancelled missions, restrictions or postponements of events and conferences, which resulted in decrease of customer flow. Comparing last year’s data of the first half of the year with this year, the number of people visiting Kaunas decreased by as much as 58 percent, and the number of overnight stays decreased by 54 percent.
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This year, several thousand businesses in Kaunas will receive help from the city. Kaunas city municipality administration, having reviewed the list of companies affected by the pandemic compiled by the State Tax Inspectorate, counted more than 3000 urban companies for which the local fee for real estate, land or state land rent is reduced by 25 percent.
Sports clubs, pharmacies operating in polyclinics, school canteens and many other businesses located in the premises managed by Kaunas municipality are exempted from rent. The benefit for tenants who have suspended or severely restricted quarantine activity ranges from 70 to 100 percent. A separate decision abolished the fees for permits to trade in public places for all cafes, restaurants and other catering establishments of Kaunas and created conditions for the maximum expansion of outdoor terraces, if this does not disturb pedestrians and ensures the safety of those around them. It is estimated that the city’s support for Covid-19-affected businesses has already surpassed 1 million euros.
