Tourism Analysis: Unbroken Desire to Travel, But Lower Revenues

After the season in winter 2021-22 was impaired due to the pandemic and the shortfall compared with the pre-crisis winter season 2019 was over a third (arrivals) and a good quarter (overnight stays), there was great concern before the start of last winter that high inflation would further delay the recovery of the Austrian tourism industry. Surveys on vacation behaviour also confirmed that vacation planning among both domestic and German guests was influenced by inflation. Ultimately, however, there were no significant decline in the length and frequency of trips, so that the number of guests and overnight stays increased strongly. Revenues, however, were unable to keep pace: according to an estimate by WIFO, while revenues rose by +9.3 percent in nominal terms (to 16.5 billion €) compared with winter 2018-19, in price-adjusted terms this resulted in a decline of just over 13 percent. Although guests increased their vacation budgets in response to inflation, full compensation for the higher prices did not take place.

Outlook summer season 2023

The Austrian tourism industry currently has a positive outlook on the coming summer: The data from the WIFO-Konjunkturtest (business cycle survey) concerning the assessment of the future business situation in accommodation and catering have shown a clear upward trend so far this year. Positive prospects for the 2023 summer season can also be derived from the results of various recent guest surveys in Austria as well as in important source markets such as Germany and the Netherlands, but the trend toward frugality during vacations continues to be observed – the real revenue development will therefore also lag that of arrivals and overnight stays in the summer. The expected increase in demand will be driven primarily by guests from foreign markets, while domestic guests will again be increasingly drawn abroad.

On the basis of this information, an overnight stays scenario was drawn up for the summer of 2023: according to this scenario, the pre-crisis level could be exceeded by 1 percent to 2 percent over the course of the season and a new peak in overnight stays could be achieved in the coming summer season with a total of over 80 million overnight stays. The number of overnight stays by foreign and domestic guests should exceed the level of summer 2019 by around 1.5 percent; compared to summer 2022, this corresponds to an increase of 5.4 percent for foreign travelers, while a decline of around 3 percent is expected for overnight stays by domestic guests.