This year is a lost year for EU funding for the hotel industry, with Westin Dragonara’s director of finance, Malcolm Jones, saying that the Maltese economy is suffering and projects are on hold because the government has “underestimated” the time needed for funding programmes to get the green light from the EU.
“There are no funds. There is nothing coming out in 2014 and everywhere is at a stall. They have to go fast. They have not yet structured the projects for which Malta has to apply for funding with the EU. Once you [the government] apply it takes at least six to eight months to get a reply from the EU,” Mr Jones said.
Mr Jones explains that the return on investment for environmentally friendly projects is very long, therefore if no EU funds are available in 2014 the Westin Dragonara will put the brakes on its plans.
“Projects are on hold, we are now looking towards the next programming period, there are certain projects lined up which could make us more environmentally friendly but we are not going to do them.
“We have a whole year down the drain, over the last four years there were always calls coming out, things were always moving within the hotel industry, but in 2014, zilch, nothing. We are now looking towards 2015 and 2016,” Mr Jones said.
He points out that in today’s world nobody can afford to be at a standstill. Plans for a project have already been given the go-ahead by the Westin Dragonara’s board, and they are just waiting to “kickoff and invest” once EU funds are available.
Transparency and adjudication
Westin Dragonara’s director of operations, Jonathan Borg says that the application process for EU funding is “tough,” even for a big company. By way of example, he says that three comparable quotations need to be obtained which can be quite difficult for more intricate projects, given the lack of local suppliers.
“We are quite well set up so we could carry the burden better than a small company. It would cost them an arm and a leg as they will need to bring in an external consultant,” Mr Borg said.
A relatively small project cost the company €1,500 in external consultancy fees and two months worth of preparation internally.
Both Mr Borg and Mr Jones say that there is a dire need to digitise the whole application system, as at the moment companies end up drowning in paperwork.
Mr Jones also says that there is a need to increase transparency in the adjudication process of EU funding.
“It is very important to increase transparency. There is just one appeal, and the appeals are never upheld. It is literally like a music festival, you have a lot of people applying and you have one board which decides how many points to award you with and tell you whether your application is successful or not.”
“There is no appeal to the appeal, you have to say ‘yes sir, I agree with you’ and stick with it. We are a big company, it does not really bother us so much, life goes on. But if you have a relatively small company, who went through the whole process, paid consultancy fees, and then you just have four people on a board telling you, sorry, your application was not shiny enough, I don’t think it is good,” Mr Jones said.
Successful projects
The hotel industry can benefit from funding in a variety of ways. Westin Dragonara has installed capacitors for high energy consuming equipment thanks to an energy grant scheme applied for under Malta Enterprise.
The hotel has also used EU funding to upgrade its gym equipment, to install a new CCTV and parking management system, improved its energy management system and installed wireless internet in all guest rooms.
The funding has also gone towards marketing campaigns which promote both the hotel and Malta as a tourist destination.