WIFO Shows Steady Recovery In Austrian Tourism Since The Beginning Of The Year

In contrast to the lockdown-related total loss of the 2020/21 winter season in Austria (overnight stays -92.4%), tourism demand increased steadily in the past winter after renewed closures at the beginning of the season, so that the gap between November 2021 and April 2022 compared to the pre-crisis level of 2018 /19 to an average of just under 28% for overnight stays and a good 19% in terms of nominal tourism income. The expectations of the Austrian tourism industry for the current summer season are consistently positive, after two years of restrictions due to the pandemic, the desire to travel at home and abroad is great. However, the tense geopolitical situation caused by the war in Ukraine and its economic effects, above all the massive rise in prices, are increasingly clouding the prospects for the coming months.

Despite rising inflation and considerable economic and political uncertainties, the entrepreneurial assessment of the current business situation of European and Austrian tourism companies (according to GD GROW, Confidence Indicator for Industrial Ecosystems or WIFO business survey) is currently very positive: On the supply side, new ones were added in May 2022 Highest values ​​​​of both indicators reached. Due to the wage pressure due to the shortage of skilled workers and the high inflation rates, the rising raw material and energy prices as well as the return to the usual sales tax rate in the hotel and catering industry after the end of the COVID-19-related temporary reduction, further significant price increases are also expected in tourism in the near future to reckon with. Rising costs will have a negative impact on corporate value creation,

On the positive side, many guests - especially those in the middle and higher income brackets - are obviously willing to expand their holiday budget for the summer of 2022 in order to take inflation into account and not have to restrict their travel plans. This is the result of a recent ÖAMTC survey of Austrians on summer vacation 2022. According to this survey, an increase in the average vacation budget by 15% compared to 2021 can be expected. In addition, many trips and the associated expenses tend to be planned well in advance and thus booked at a lower price in an environment of high and accelerating inflation rates. An inflation-related decline in tourism consumption is therefore not to be expected until the end of the year.

A greater desire to travel compared to the two pandemic years can also be derived from the recent ÖAMTC survey; however, the destinations of Austrian travelers this summer will increasingly be abroad again (56% of those surveyed, 2021: 43%) - so it can be assumed that there will be certain catch-up effects when traveling abroad. Southern European destinations in particular will benefit from this increased willingness to travel internationally, combined with the desire for holidays by the sea, but Austrian city tourism, which was hit particularly hard by the effects of the COVID-19 crisis, could also benefit from these catch-up effects.

Given the current political and economic environment, but also the uncertainty about the further course of infection, these forecasts are still subject to great uncertainty. For the summer of 2022, taking into account the factors mentioned or based on the development assumed for this, there would be a total of around 75 million overnight stays

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