Confined Hosts

Following the decision to contain the Covid pandemic, advice from hotelkeepers is proving useful.

 

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The importance of taxation is also underlined in the context of furnished accommodation. At the end of the crisis, do not hesitate to prioritize the classification of your furnished accommodation.

Sharing the best ideas for your vacation rental

Hello to all,

I will have the pleasure of receiving Frédérique Dispagne – hotel owner & seasonal operator – on the Facebook page of J’affiche complet on Monday, May 4, 2020 at 8:00 pm….

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Furnished – Classification reference (all categories)

OEC furnished 06-04-2020

In Fort-de-France, the Stay tax is provided by the CACEM.

A Residence Tax Interface Guide makes it easy to update the data.

The tourist tax scale is here.

Take care of yourself

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Taxation of the Professional Furnished Rental

The regulated classification of seasonal rentals remains marginal. However, it has great financial and fiscal virtues. The goal of this article is to make a simplified point of the LMP tax system and to convince you to be classified.

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The article discusses the tax situation of the Professional Furnished Renter (PFR)classified and unclassified.

If you opt for a seasonal rental, in any case, you are required to declare your income.

To be considered as a Professional Furnished Renter, and no longer as a Non Professional Furnished Renter (NPFR), two conditions are necessary:

Your annual rent is greater than €23,000 per fiscal household.

AND your Turnover generated by this rental is greater than all your other income.

The « Furnished Tourist Accommodation » is a typology of official classification of an PFR (or NPFR), in the same way as the Bed and Breakfast, in parallel with the PFR (or NPFR) not classified.

The Company form is necessarily commercial.

INCOME TAX	CORPORATE INCOME TAX
SARL
EURL
SAS/SASU
SNC
SOLE PROPRIETORSHIP

In SARL – EURL, you have the advantage of limiting the loss to the amounts of the contributions.

In SA, the regime is heavy unless you have many locations and collaborators to manage.

In SAS – SASU, it is a simple contract between partners.

In terms of social security charges, the general scheme for employees is heavier than the RSI.

The subject has been settled since the regulation of management by the Social Security (between 25 and 30% of social security contributions).

1. PFR Taxation Regimes

	MICRO ENTREPRISE MICRO BIC	Simplified real regime	Normal reel regime
Classified Furnished	Annual turnover excl. taxes < 170 000 € HT	Annual Turnover excl. taxes entre 170 000 € et 789 000 €	Annual Turnover  excl. taxes > 789 000 € HT
Non Classified	Annual Turnover excl. taxes < 70 000 € HT	Annual Turnover excl. taxes entre 70 000 € et 238 000 €	Annual Turnover excl. taxes > 238 000 € HT

Micro-BIC taxation regime

You are therefore almost always concerned as soon as you have opted for an official ranking.

You are automatically covered by the flat-rate scheme if your income does not exceed €170,000 per year as a Furnished Tourist Accommodation.

They do not exceed 70 000 € if you are not classified.

The Micro BIC regime is the most readable and most suitable. Its operation is particularly simple.

It requires no accounting skills, no help to fill in the income tax return.

The scheme is very suitable for individuals.

You report the amount of income on the complementary income tax return n°2042 C pro (line 5 NKP to 5 MP).

On these receipts, you benefit from a flat-rate allowance of 71%.

Consequently, only 29% of your income is added back to your total income for the year and then taxed.

Real Plan

As soon as the ceiling as Furnished is crossed up to 170 000 €, or without classification, up to 70 000 €, the real regime is imposed.

You can opt for this regime if your charges exceed 71%.

You are then taxed on the income tax scale on 50% of income (automatic 50% allowance for expenses).

Thus, on these receipts, only 50% of your rents and charges are reintegrated into your total income for the year and then taxed.

You deduct the expenses in reality:

– Ownership and management charges (depreciation, financial expenses, loan interest, major repairs), in proportion to the rental period.

– The expenses related to the rental (advertising costs for example) in full.

You report the amount of the profits on the professional declaration n°2031-SD.

You deduct all expenses for their exact amount on the professional declaration n° 2031-SD.

Under the simplified tax regime (RSI), known as « real simplified », your tax is based on your actual profit.

You benefit from reduced accounting and reporting obligations and the application of VAT.

It concerns companies subject to Income Tax or Corporate Income Tax.

Within the framework of the normal real regime, it is the ordinary law regime that applies, governed by the Corporate Income Tax (CIT).

It can happen that a rental company strategically decides to opt for the real plan even though it is lucky enough to remain within the Micro Bic framework.

 If he is not classified and his annual income does not exceed €70,000, he can apply for the real plan as an option if his deductible expenses and charges are greater than 50% of his income.

 If it is classified and its annual revenues do not exceed €170,000, it may apply for the optional plan if its deductible costs and expenses are greater than 71% of its revenues.

To opt for the actual scheme, a letter on plain paper to your tax department is sufficient.

The letter must be sent before February 1 of the first year in which you wish to start the actual plan.

It lasts for a minimum of two years, and is then tacitly renewed, unless you give notice of termination.

Case Study

I rent a Furnished Tourist Apartment in Fort-de-France.

I receive 10 000 € of income for the year 2019.

I hesitate to classify it and make a quick calculation.

My taxation :

On (30 000 € x 50%) = 15 000 € will be reintegrated into my income for the year 2019 if it is an undeclared seasonal rental: tax rate 11%.

On (30 000 € x 29%) = 8 700 € will be reintegrated into my income for the year 2019 if it is a Furnished tourist accommodation classified: no tax to pay.

On these results, you apply the allowance corresponding to the income tax bracket.

I encourage you to declare yourself and be classified in order to benefit fully from this favorable regime.

2. PFR Tax Situations

The declaration of activity is unavoidable for PFRs (classified or not) at the Centre de Formalités des Entreprises.

LODEOM

Whatever the application regime, the application of the new overseas LODEOM exemption is effective.

The exemption benefiting employers located in the French overseas territories (except Mayotte) has been completely modified in 2019.

In Guadeloupe, French Guiana, Martinique and Reunion Island, 3 so-called « enhanced competitiveness » scales are now applicable depending on the company’s situation.

Corporate Property Tax (CPT) and Housing Tax.

As a general rule, all Furnished Furniture, carrying out a commercial activity, are subject to the CPT.

Persons who rent furnished premises included in their personal dwelling and classified under the conditions provided for in Article L. 324-1 of the Tourism Code are exempt from CPT by virtue of b of 3° of Article 1459 of the CGI.

Seasonal rentals are nevertheless subject to the CPT as long as they are not a main dwelling.

The renter in Furnished taxable to the CPT is not liable for the housing tax.

Property tax abatement

The exemption applies in the Rural Revitalization Zones (ZRR) mentioned in article 1465 A of the CGI.

List of RRAs in 2019.

Tourist Tax

Bercy had well planned an increase in the tourist tax for the Furnished not classified.

This forecast will take effect as of January 1, 2019, and was voted on by the Finance Committee at the General Meeting.

The amendment considerably increases the tourist tax for unclassified accommodation.

If you are classified, you benefit and make your customers benefit from a fixed tourist tax.

The rates of the visitor’s tax are between €0.20 and €4 per night per person.

If you are not classified, since 01/01/19, the tax is paid as a percentage of the rate per night but remains capped at the lower of the two following rates:

– The highest rate adopted by the community.

– The ceiling rate applicable to the 4-star tourism category (i.e. €2.30 in 2019).

In all cases, the tourist tax is paid to your commune in Martinique by the CACEM.

Tax Credit and Reduction

Structures submitted to income tax	Structures submitted to corporate tax
Tax reduction 25% of the investment cost minus received public aid	Tax credit 35% of the investment cost minus received public aid

State aid

The recommendation is to start by exhausting the tax credit or tax reduction (above) and then apply to the State for its investment aid.

For investments below 200 000 €, you can call upon the Territorial Community of Martinique (CTM).

For investments above 200 000 €, you can apply to the European Development Fund (ERDF).

In conditions of eligibility? To be classified in order to benefit from the subsidies and to have a « favorable tourist framework ».

Deficits

Unlike the Non-Professional Furniture Renter (NPFR), the Professional Furniture Renter (PFR) can charge the deficits recorded on the total income of the tax household.

If the overall income is not sufficient, you carry it over to the overall income of the following six years.

The allocation is allowed provided that the deficit does not come from depreciation, which is not tax-deductible.

Capital gains on disposal

Capital gains on disposals are exempt if the activity has been carried on for more than 5 years.

If revenues are less than €90,000: total exemption.

If revenues are less than €126,000: partial exemption.

Invested assets may be exempt from real estate wealth tax (IFI).

In addition to the above-mentioned condition, the professional lessor proves a professional activity whose income is higher than the other incomes of the tax household.

Tax exemption

It must be new.

For the furniture aspect, invoices must be provided to be deducted.

For the real estate aspect, you provide proof of expenses for major renovations.

It is preferable to make an appointment with the administration or a consulting firm to qualify the heavy renovations.

Filing a building permit to modify the structure makes the process easier.

VAT

If your revenue exceeds the threshold of €82,800 and you provide at least three para-hospitality services:

breakfast

daily cleaning of the premises

supply of linen

the reception of the customers,

you charge VAT and deduct it from your purchases and expenses (to avoid unfair competition with hoteliers).

Integrating it into the financing plan, upstream, is a winning strategy for tax optimization but above all for cash flow.

For a selected VAT around 8.50% (accommodation services being taxed at 2.10%), the VAT on the purchase or construction cost of the building, the real estate, can be fully recovered.

Generally, the operator obtains a VAT refund from the tax authorities.

The shell, on a copy of the invoices, is today eligible for tax exemption.

If the furniture has been acquired for 3 years, you can still recover 2/5 of it, according to the 20th real estate rule.

Prefer the simplified system of the 2 installments (July and December) in case of a small structure.

The Must’s

– You cannot classify a SCI as a furnished tourist accommodation, a form of company in its own right subject to the tax.

You create a parallel commercial company that pays rent to the SCI.

These rents must be fixed, because the administration would consider the SCI as having a commercial activity.

– In the context of a high level of depreciation and investments (especially at start-up), it is often more interesting to opt for the simplified real regime.

At cruising speed, the Micro BIC is often more appreciable.

Hotel Singularity

For two centuries, hotel singularity has been dominated and almost exclusively reserved for ultra-luxury. The revolution in service codes and the transparency of atypical offers on the Web are revolutionizing the benchmark for « exceptional hotels ». So how does one become a singular accommodation today?

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For a long time I wondered what, in the hotel business, and more generally in the areas of service, was exceptional. What kind of concept, brands and invariably brings guests in? What’s the recipe for top of the class and how do you duplicate it? A brief benchmark of practices in our sector can be a source of inspiration that can be adapted to our different categories of establishments.

On closer inspection, the operational exception has its roots in the luxury hotel industry, alongside the classic inn celebrated in the beautiful feature film Hôtel du Nord. Born in the 19th century, the exception is embodied in France by its very first palace, Le Meurice, 180 years ago. The services are innovative and exceptional: soap-washed linen, car rental, room service …

A little over half a century later, Caesar Ritz’s visionary establishment emerged, with a bathtub, private bathroom and telephone in each room, and an elevator on every floor.

After the Second World War, Paris, Nice, Monaco, Deauville, Biarritz became the strongholds of luxury and exceptional hotels. In Nice, the Negresco is the only French establishment to be equipped with a steam boiler, switches and a pneumatic post to deliver the mail in the rooms.

Luxury and exception were one and the same

The Palace qualification will be officially recognized as of 2010. It distinguishes itself from high-end establishments by combining two requirements: being 5 stars and enjoying the Palace distinction.

The exclusive and discretionary classification is reserved for 25 palace establishments in France. The label of exception is obtained in two phases: an expert jury examines the 5-star establishment, at least one year old, with a Spa and a multilingual team. Once this first airlock has been passed through, Atout France, the State operator, decides on the eligibility of the establishment on the basis of 200 criteria.

The award commission is made up of personalities from the worlds of literature, arts, culture, media and business, appointed for a renewable 3-year period by the Minister of Tourism.

The French distinction « Palace » is a response to the need for a palace, whether the standard withered its magic, or whether the multiplication of competition from the four fundamental palaces made this standard necessary… The French distinction « Palace » is intended to meet this need.

Considerable efforts are made in ultra luxury to continue to seduce a delicate and demanding clientele. Historic hotel luxury is no longer intrinsically the only expectation and consideration to embody the exceptional product and the exceptional experience.

The hotel exception is gradually no longer synonymous with luxury in its classic and historical perception. For more than two decades, singularity has flowed through the names « Boutique Hotels », « Design Hotels », « Concept Hotels », « Pocket Palace », « Experience Hotels », etc…

The standards and qualifications are not necessarily very clear, but the offer is prolific and is gradually structured around real customer expectations.

1. The real case by case

As part of the profound and sincere redefinition of luxury, La Réserve Paris, recognized as a Palace, makes a clear bet: fewer units (40 rooms and suites), more dedication to the client. The philosophy of the Michel Reybier group is to reduce the volume of units for a time dedicated and personalized to each client. The functions of gastronomy, florist, floors have one or even several Meilleurs Ouvriers de France. The exceptional treatment and customer experience has earned the establishment recognition two years in a row as the best hotel in the world and in Europe by the Conde Nast Traveler and the US News&World Report.

2. The framework

As a major trend in the hotel industry in the context of its medium and high-end renovations and restructuring, decoration is no longer a secret for the sector. In addition to the undisputed and prolific figures of designer Philippe Starck (Mama Shelter, the Royal Monceau, Brach, Hotel 9 Confidentiel…) and decorator Jacques Garcia (Maison Souquet, the Hotel, the Oscar in London…), other talents are imposing their style: Dorothée Meilichzon, Stella Cadente, Jean Philippe Nuel….

3. Innovation

Home automation

The objective of home automation is to ensure customer comfort without having to move around in the room and to manage the energy of the establishment. The Citizen M hotels with their touch-sensitive tablets are pioneers in this field. A single workstation controls the ambient temperature, lighting, the Web, TV and radio channels, service control, alarm clock, etc.

Biometrics

Check in – check out with your smartphone, seal your safe by fingerprint or facial recognition, it’s done. The field of possibilities is open to a precise knowledge of the customer’s profile (age, sex…), his weight, his health (heart rate, weight), his food consumption at the minibar.

High tech equipment

Glass is explored in all its potentialities: opaque glass to the touch for shower walls to guarantee privacy, magnifying mirror integrated in the bathroom mirror to save time).

Flat and connected screens are embedded in the mirrors. The Artemis intelligent mirror allows the magnifying glass function, the 360 vision to see each other from the back and from the side. It analyzes the skin texture and the adapted treatments, beauty tutorials, and … the check out.

The sanitary facilities are also sexy and atypical, in restaurants and hotels. The French brand Throne is revolutionizing the intimate experience of sanitary facilities.

4. The sustainable

The trend is towards ecology or « green effect ». In 2014, the Green Air Hotel concept born in China aims to upgrade aging hotels with purified air and a refreshing space. The concept will be generalized in the United States by 2020.

5. The staff

An exceptional hotel is a hotel that radiates its staff and its well-being. It is no longer a question of dissociating customer satisfaction from internal satisfaction : the expectations of the new generation of hoteliers differ from the previous ones : fulfilment, social usefulness, team motivation.

The staff, too, is becoming robotic. At the Campanile in Shanghai, it is a robot that ensures the check-in and customer follow-up.

The exceptional has gone from luxury to the quest for simplicity, simplicity and authenticity in human relationships, in daily and practical uses, in the flexibility of the offer, in the wonder, in the rooms or the promotion of the most instagrammable living places, in the respectful (even egalitarian? ) contact with the staff.

New offers related to this mutation are emerging such as the Glamping contraction of glamour and camping. Urban hotels are being transformed into family homes. Eco-lodges are sustainable examples around the world.

We no longer speak of a compartmentalized « reception » but of a welcome, of a « lobby » but of a place to live, of a « personal » but of an « ambassador ».

Day after day, the hotel industry proves its ability to reinvent itself, to adapt to the new model of society, and to surprise us with its exceptions.

 In a forthcoming article, we will discuss simple and quick techniques for establishing a business forecast.

The Hotel Industry will be Sustainable

The idea came to me while having a drink with a hotel owner committed to a sustainable approach.  I am not spontaneously sensitive to environmental issues. But by digging effortlessly, It’s a commercial treasure offered to us. Here, I’ll tell you the benefits to which I am particularly sensitive: financial performance, guest perception, staff motivation.

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I opened the first ecological hotel in Paris. The concept of ultra-claimed urban eco-lodging, a follower of the green attitude, was born in 2011, never to be duplicated. When I left the establishment, I promised myself that I would no longer venture into the land of the environment. Customer feedback was too mixed and even hurtful to make it a success. While some were encouraging and seductive, the vast majority, reading our e-reputation, felt that :

• We were saving money to their disadvantage.
• We did not ensure a real quality of equipment: the low-energy lamps did not provide enough light, the water mixers did not allow sufficient pressure.
• We were a marketing sham.

With hindsight, I’m convinced that we were a sham in my ecological approach. Making sustainability an image success is within the reach of all hotel owners! Several structures around sustainable and concrete practices have already mobilized around the sector, with maturity and a good understanding of the market.

Sustainability is no longer the Holy Grail

For a long time, the environmental approach was exclusively sanctioned by a label. Among them, the Green Globe, on the international scale of ecology, is the Everest international. The Green Key and the NF Environnement mark are well known and recognized eco-labels at the national level; at the European level, the European Eco-label, without forgetting the ISO14001 and EMAS certifications, which are used more for B to B than B to C purposes.

An idea emerged from the Grenelle de l’environnement: environmental signage. The concept? There is no need to be exhaustive in the approach, simply to indicate the efforts made as part of a voluntary approach.

Yes, my super-committed hotel has opted for the systematic sorting of its hospitality products, batteries and toners, yes it has opted for LED bulbs in its living areas and rooms. But no, she has not yet taken the step towards green electricity. As a good housewife, she wants to take a step back on the reliability of the deployment and not impact her guests. So she doesn’t have 20/20, but she is working on it. We call this path an environmental label or display.

Out of 150 hotels piloting the approach since 2011 (a panel made up of 2* to 5* hotels, of which 68% are 3 and 4* hotels – almost equal distribution between independent and large groups: 56% independent hotels and 44% chain hotels), the results show that the approach is being implemented in a number of countries:

30% environmental gains, including greenhouse gas emissions, energy consumption, water and waste.

Reduction in the panel’s operating costs of around €0.50 to €2 per night. 2 € per night seems to be on the margin; calculating on the basis of a 50-room hotel, at 80% occupancy rate: 50 rooms X 80% of TO X 365 days per year X 2 € = 29 200 € per year represents one month of additional GOR (Gross Operating Income).

Beyond the encouraging cost-killing and the concrete means to measure it, the environmental label draws us two ultra – profitable investments which are Guest perception and Staff motivation.

Stakes

Guest perception

Guest perception is the most sustainable financial benefit.

The Booking.com study « 2017 Sustainable Travel Intentions, Goals and Considerations » has contributed significantly to the media coverage of the topic. Among other edifying statistics.

68% of respondents said they chose an establishment that is primarily eco-friendly.

79% of respondents make their choice of transportation mode based on environmental considerations.

There is a market and therefore a way to monetize it. To achieve this, how can we make a hotel’s sustainable approach visible and transparent? To be recognized, eco-labeling makes visible a coherent and global effort to improve the environment, or even sustainable development. It is a marker of commitment and trust for the end customer if it is well known.

On a national scale

The French hotel ranking totals 6 mandatory points and 25 optional points in favor of sustainable development.

Reference	Criteria	Points
229	Raising employee awareness of efficient energy management	2
230	Raising employee awareness of efficient water management	2
231	Raising employee awareness of economical waste management	2
232	Guest information on the establishment’s actions in terms of sustainable development	3
233	Informing guests about the actions they can take during their stay in terms of sustainable development	3
234	Staff training in the economical management of energy, water and waste	3
235	Implementation of at least one measure to reduce energy consumption	2
236	Rooms equipped with 100% low consumption light bulbs	2
237	Common areas open to the public 100% equipped with low consumption light bulbs	2
238	Implementation of at least one measure to reduce water consumption	2
239	Implementation of at least one waste management measure	2
240	Use of environmentally friendly cleaning products	3
241	Presence of eco- friendly hospitality products in the bathroom	3

On a European scale

The European Eco Label specifications are strict and include 90 criteria, 30 of which are mandatory. Its demanding and exhaustive nature can be discouraging. In the long term, it will ensure the transparency of the hotel offer, will reinforce the European clientele in its choices and may become a certification either mandatory or highly recommended.

According to the UNWTO (World Tourism Organization), the strongest growth in tourism is in Europe and Asia. The issue of sustainable visibility for France as a destination is crucial.

In order to prepare this marathon without getting discouraged, small runs marked by the environmental label are proving to be very useful. Identifying areas for progress, planning a business plan, and consolidating results in concrete terms are all valuable motivations.

Software such as Winggy is, to my knowledge, the most advanced compiler for the hotel industry. To date, it is also the only software that can be used to issue environmental labels for hotels and restaurants. The software compiles the impacts of reductions in consumables (food, textiles, hospitality and maintenance products) and equipment (heating, water management, swimming pool, electrical equipment).

On an international scale

For a first international visibility, you can opt for Trip Advisor’s « EcoLeaders Program ». It offers the hotel owner the opportunity to self-assess its good environmental practices and present the EcoLeader badge on its page. It can be a first approach to international visibility.

The Green Passport approach is a product of the United Nations Environment Programme. At the heart of the subject: the creation of international destinations of excellence within the framework of sustainable tourism.

The Green Globe certification is the program unanimously recognized internationally since 2002.

Staff Motivation

A motivated staff is a staff that makes our guests happy. What a strong argument in the environmental commitment. The key factors of mobilization are intense and numerous. To have objectives and a cause, to make sense of professional collaboration, to live its usefulness within the framework of a company, to perceive one’s hotel as having a positive impact on the world, to get out of one’s surroundings, to encourage professional exchanges.

Precisely because they are so numerous, these motivations must be channeled around a clear vision and a unified process. To deploy it in the field, the approach is structured into business sheets. Concretely, by inserting simple and recurring routine procedures. The introduction of environmental objectives can be used in the annual performance evaluation of facility managers. The action plan is determined over 1, 2, 3 years.

I enjoyed reading the practical guide to the Thau Lagoon. The destination has mobilized its team (i.e. its tourist accommodation) around its communication objective. I advise you to reproduce it more succinctly in order to submit an action plan to your team.

Recommendations

Unisoap collects all your soaps and recycles them to improve hygiene in underprivileged countries as part of an ecological and social approach. Its Anglo-Saxon counterpart is Cleanworld.

Too Good To Go manages the unsold food products and buys them to resell them. Instead of throwing away your breakfast pastries, you can give them back to them. The manifesto of commitment is readable and their interventions are multiplying on the national network.

Dispensers, adapted to each hotel range. They communicate directly (through an explanation) or indirectly (through the brand) on the high quality of the product. They are always full and allow a generous use to avoid the pitfall of cheapness. For hotels with a strong DNA, having them designed by a decorator is an option.

Local, organic and bulk products. The One Thousand Plants console combines the use of the bath infusion, the tea bar, the infusion jar (especially for spas and wellness areas).

Professional steam cleaners are subsidized by the state to reduce occupational hazards. Virtue: reduce the excessive use of cleaning products that are toxic to humans and the environment, replacing them with the powerful action of steam to clean hotel spaces.

However, as I recall my painful Hi Matic story, this guest perception has its setbacks. How can we not be suspected of green washing when we take a sincere approach?

By not touching the Essential

Low-energy light bulbs and overly efficient mixers are to be banned. The measures avoid altering the raison d’être of the hotel industry: a better home than at home, a comfort for which we have paid. Otherwise, our guest, fooled, is waiting for us at the intersection of Quality – Price, equipped with a club.

Highlighting our Global Responsibility

Your commitment is not only based on your energy saving benefits or paperless. It also involves efforts that « cost » you.

Rigorously based on a sustainable approach, you provide high quality breakfast, hospitality products, drinks…. You communicate about the customer benefits, well-being, better living, health, taste … that such an approach allows.

Our guest feels that at every level of our decisions, we do so out of love.

Love of the service we dedicate to them, love of our environment that we seek to preserve, love of our destination that we wish to promote.