Austria's hotel industry looks to summer with cautious optimism

Overall, hotels are "well booked, meaning not fully booked, but at a good level," Stanits summarized the current development. With a view to the further bookings already on hand, the domestic hotel industry is "cautiously optimistic." The summer season is economically speaking "not yet a mown meadow," as the spokesperson of the Austrian Hotel Association emphasized.

A key reason for the restraint is the sharply increased costs of accommodation businesses. "The issue is rather the revenue level, the cost increases," said Stanits. The industry benefits from robust demand but has to cope with higher expenditure. "There have certainly also been new beds coming onto the market," the spokesperson of the upscale hotel sector qualified the recently reported record figures.

Costs and new beds weigh on the bottom line

At the same time, hoteliers are observing a noticeable shift in booking behavior. "Increasingly short-term for us means booking ten days in advance now," said Angelica Freyler, spokesperson of the wellness and seminar hotel Schlosspark Mauerbach in the Vienna Woods, to the APA. Last year the average was still 17 days, and before the Corona pandemic it was six weeks. "The character of 'last minute' is gone, because 'last minute' is normal – this form of booking has been taken to absurd extremes."

Short-term bookings become the norm

The short-term nature has different effects on different guest groups. "I know couples who only book when they're already flying to a city – with children you don't dare do that; and business travelers don't do it either, or someone who's spending a lot of money on a room," the ÖHV spokesperson said. The bulk of overnight stays in domestic hotels comes from vacationers from Germany and Austria.

When it comes to guests' price consciousness, clear shifts are evident. "People watch their money," the industry spokesperson reported. Vacationers are partly switching to one- and two-star hotels: "The strongest increase is in commercial vacation apartments – people watch their money," the industry spokesperson reported with a view to July and August.

Geopolitics hits guests from the Middle East and long-haul markets

The geopolitical situation is also leaving its mark on booking statistics. "For many years now we've lost the Russians, lost the Ukrainians – in some cases we're also now missing the Arab region, Israel, and more distant regions that have to travel via the airline hubs in the Middle East," Stanits reported. The major international transfer airports of Dubai, Doha, and Abu Dhabi can connect guests from more distant regions, "but there are uncertainties in terms of sentiment. It's not buzzing there."

At the start of this summer season, domestic accommodation businesses recorded a collapse in bookings from the aforementioned markets for May and June, with Statistics Austria reporting a drop of 43.8 percent to 138,000 overnight stays compared to the previous year. "Naturally the effect is even stronger on the Arab markets," Stanits said. Their share of total bookings in Austria, which totaled more than 22 million overnight stays in that period, was small, but the decline nevertheless hits the industry hard.

"But these are also guests who leave a particularly large amount of money in the country," the industry spokesperson explained. The fact that they are increasingly absent "of course hurts." At the same time, Stanits pointed to the overall small share of these guests in total bookings in Austria. "But that is known, and one lives with it." Moreover, bookings are increasingly arriving at short notice, which complicates planning.

At the same time, Stanits sees the long-term development in a nuanced light. "Whoever really wants to fly will come, will manage it – it's not always the rational data that play a role here," the ÖHV spokesperson remarked. How the geopolitical tensions will specifically affect bookings remains open for Stanits: "That remains to be seen." The weather, too, is a certain factor of uncertainty for the industry.

Regional differences shape the summer

The booking situation varies greatly by region. "It's extremely varied," Stanits stressed. While some establishments in classic tourism regions are well occupied, others are struggling with capacity issues or a changed guest mix. Industry representatives therefore expect a heterogeneous summer season, the outcome of which will depend significantly on the coming weeks.

The mood in the industry therefore remains cautiously optimistic. "If nothing major happens, this will be a good summer," Stanits added. Recent years have shown how quickly framework conditions can change. It is all the more important to closely monitor the ongoing developments and respond swiftly to changes in booking behavior as well as political developments.

Outlook: dependent on politics and weather

The overall economic situation of domestic hoteliers heavily depends on whether the increased costs can be passed on through higher prices. "The issue is rather the revenue level, the cost increases," Stanits said, supplementing his comments on the record overnight-stay figures and the overall situation of domestic hoteliers. The industry thus faces the challenge of maintaining occupancy while keeping an eye on margins.

With a view to August and the remaining holiday weeks, the hotel industry hopes for further stabilization of demand. "If nothing major happens, this will be a good summer," Stanits looked ahead. The final balance sheet of the summer season will show whether the industry's cautious optimism was justified.

The interviews were conducted by Birgit Kremser (APA).