Austrian Tourism Analysis: Inflation Affects The Winter Season
The current WIFO tourism analysis shows that demand has increased significantly compared to the summer season of the previous year. With around 78 million overnight stays, the pre-crisis level of summer 2019 was almost reached (–1.4%).
The prospects for winter 2022/23 will be affected by high inflation, but cautious optimism seems warranted - a good booking situation at the beginning of winter could reduce the overnight stay gap to the 2018/19 season to an estimated 5%. The revival of summer tourism in Austria is mainly due to domestic demand: With 24.3 million overnight stays, a new record was reached in this segment (+4.4% compared to the 2019 season). International travelers also increasingly came to Austria again in the summer months of 2022 (+26.5% compared to the previous year), although demand was somewhat more restrained than before the COVID-19 crisis (3.8% compared to 2019).
According to initial WIFO estimates, income from overnight and day tourism in Austria was nominally almost €14.7 billion in summer 2022 - 0.8% more than in the 2019 season shopping basket, this means a price-adjusted 14.7% lower turnover than in summer 2019. Distortions on the energy markets caused by the war and the surge in inflation are also having an increasing impact on the tourism industry, with the price increases for "essential" products and services (e.g. food or household energy) having a particularly negative effect on tourists' holiday decisions and also on the tourist offer massively more expensive.
Recent surveys of domestic hotel businesses and private households in Austria and Germany recently gave a mixed picture: the sales expectations of many businesses for this winter are therefore hardly above the revenues of the previous year. Only 70% of the domestic and around two thirds of the German respondents stated that they definitely want to travel this winter as well.
The main reason for the reluctance is not the pandemic, but inflation, and many guests want to save on vacation, especially when it comes to spending on shopping and consumption in restaurants, but also on accommodation. Destinations that have specialized in high-income groups of guests could thus come through the crisis better. This development is likely to have a greater impact on sales and added value in the current winter season than on the number of arrivals and overnight stays.
