Like any investment project, in any organization, anywhere in the world, the development of Hospitality 4.0 projects requires three essential resources: technical, human and financial. Technical resources to support the associated technological components, human resources to implement and operate the solutions developed, and financial resources to meet the expected costs.

While the technical and human resource requirements are specific to each project and by their nature scarce, it is important to demystify the difficulties of obtaining financial resources for these projects, because despite the apparent crisis we are experiencing, or perhaps because of it, there are numerous incentive systems and other financing instruments in Portugal and Europe that make it possible to leverage or even fully support investment projects, thus mitigating the inherent risks.

It is therefore important to know what instruments we have at our disposal. In a naturally simplistic way, we can divide the existing incentives into the following essential components:

FINANCIAL INCENTIVES FOR INVESTMENT
These are essentially direct incentives for investment (productive or otherwise) through subsidized loans, interest-free loans (repayable incentives) or non-repayable incentives (non-repayable incentives), enabling innovative projects for tradable and internationalizable goods and services to be carried out.

Examples of these incentives include the 2016 Supply Qualification Support Line (subsidized credit instrument) and the different Portugal 2020 programs, namely the Incentive Systems for Productive Innovation (productive investments) and the SME Qualification Incentive System (non-productive investments).

TAX INCENTIVES FOR INVESTMENT
Investment tax incentives are, as the name suggests, tax incentives, namely a direct deduction from the corporate income tax of investments made in the previous year, and are therefore very interesting instruments from the point of view of freeing up funds, dealing with investment already made (and not) in a project, and particularly relevant at the time of year when accounts are closed.

These incentives are covered by the Investment Tax Code, which includes the Contractual Tax Benefits for Productive Investment and the Investment Support Tax Regime (RFAI).

INCENTIVES FOR RESEARCH AND TECHNOLOGICAL DEVELOPMENT (R&TD)
Also important for financing 4.0 projects are RTD incentives. As Hospitality 4.0 is an area of cutting-edge knowledge, its projects are clearly technological development projects, creating new or improved products, processes or systems.

Here we can also take advantage of incentives from Portugal 2020, namely the Research and Technological Development Incentive System (SI R&DT) and directly from different European programs, such as the SME Instrument of the Horizon 2020 program. There are also tax incentives, such as SIFIDE, a tax credit that can recover almost all of the company's expenditure on RTD in the previous year.

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Outside the scope of this post, it is worth noting the existence of other financing instruments, namely venture capital/quasi-equity financial instruments (venture capital funds, business angels), typically aimed at investments in SMEs, in the phases of company creation and start-up (start-up, seed, early stages).

In the hotel industry, there is a tendency to frame the incentives for its operation exclusively in terms of productive investments, more precisely in the creation of physical supply - read bricks-and-mortar - forgetting or ignoring the fact that, worldwide, the truly spectacular growth in the sector has come from companies with practically no fixed assets, such as Airbnb, but also Booking, Uber and many others, which know how to capitalize on information and technology like no one else, irreversibly redefining the competitive space.

Therefore, the same incentive systems can - and in our opinion should - be channeled towards Hospitality 4.0 projects that add real value, enable innovation and position companies in a superior competitive context.

You may not have the time, knowledge resources or human resources to chase the 4.0 wave, but if your excuse is lack of money, maybe it's time to talk to the experts!