Austria Tourism Analysis: Overnight Stays Almost At Pre-Crisis Level, Inflation Dampens Willingness To Spend

Demand in Austria's accommodation providers in the first half of summer 2023 exceeded that before the COVID-19 crisis (arrivals +1.0%, overnight stays +2.0%). Not only was the number of overnight stays by domestic travelers (+3.2%), but also that of international guests (+1.5%) higher than in 2019. However, the slow decline in inflation and the worsening economic outlook dampened the mood over the course of the year, so that the balance sheet for the full year 2023 could fall slightly short of expectations.

After the Austrian tourism industry suffered significant declines in guest arrivals and overnight stays in the years 2020 and 2021, which were characterized by the pandemic (overnight stays in 2020 -35.9%, 2021 -47.9% compared to 2019), an upswing phase began last year , which also continued in the first half of 2023. In contrast to arrivals and overnight stays, price-adjusted sales in the tourism industry have not yet returned to pre-crisis levels. According to an estimate by WIFO, nominal sales from May to July 2023 were 14.5% above the comparable value from 2019, but real income remained 11.7% lower. The guests' renewed desire to travel was accompanied by a reluctance to spend.

Although almost all tourism regions, including cities, were able to benefit from the recovery in demand, the Alpine regions were particularly successful in the first half of summer: overnight stays in these regions were on average 3.6% higher than in the same period in 2019. Due to climate change These regions expect increased demand in the summer season in the coming years, which means that the problem of “overtourism” will also affect Alpine destinations.

Outlook for the full year 2023

The persistently high inflation rates and the deterioration of the economic outlook in Austria and other European countries are also clouding the expectations of the domestic tourism industry. Based on the WIFO overnight stay scenario, the volume demand in 2023 could be around 1.7% below the comparable value from 2019. The contribution of tourism to domestic economic performance will also not quite reach the pre-crisis level. However, a snowy start to winter could improve the outlook.