An Evaluation of the Guidelines and Impacts of Federal Commercial Tourism Subsidies Administered by the Austrian Hotel and Tourism Bank in the Funding Period 2014-2020

The Austrian Hotel and Tourism Bank (ÖHT) is the most important federal funding organisation for the tourism and leisure industry in Austria. Within the scope of the present evaluation, the guidelines of the support programmes offered by the ÖHT for the period 2014-2020 were analysed from an economic point of view, focusing on the economic legitimacy of public interventions and the actual funding needs of companies. On the other hand, the possible effects of the subsidies on companies and regions were estimated. The resulting recommendations can be used in the development of new guidelines for the funding period beginning in 2021. It is suggested to align the funding instruments more strongly with legitimate causes for market failures in tourism and to design them in such a way that inefficiencies resulting from financing of projects that would have been implemented even without funding, can be reduced. In addition, funding schemes should take greater account of regional aspects. Empirical evidence suggests that there is a positive relationship between subsidies and investments. However, in order to corroborate this evidence in future evaluations, additional information on the companies receiving subsidies would be required, i.e. an expansion of balance sheet data over longer periods of time and additional performance indicators for companies.