Market monitor: Austria at a glance

Most visitors come from Germany, but arrivals from China are on the upswing.  

In 2018, companies spent almost US$13 billion (€11 billion) on travel to, from and within Austria. Inbound travel made up 42% of that spending. Domestic travel accounted for 31%; outbound trips made up 27% of spending. Between 2013 and 2018, spending on international trips increased 2.5% a year, on average. But that masks volatility: Growth was 6% in 2014 and -1% in 2017. Future growth is more positive. Oxford Economics forecasts average annual growth of 5% through 2023 with all travel segments expanding at similar rates.

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• With a gross domestic product of US$420 billion in 2017, Austria is Europe’s 13^th-largest economy. Oxford Economics ranks it between Belgium and Norway.
• Services account for most economic activity. Government spending accounts for just under 50% of GDP.
• The government plays a major role in the economy. It embarked on a privatization program in the 1990s but still controls a number of companies.
• Slowing global trade and higher inflation slowed growth in 2018. Yet the Austrian labor market is strong, and resilient consumer confidence drives domestic demand.
• Austria’s economy was flat in 2013 then steadily expanded, peaking at 2.7% in 2017. Growth was an estimated 2.6% in 2018, and economists expect pressures on exports and investment to slow growth to 2.1% in 2019.

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• Excluding daytrips, international travel to and from Austria increased by 23% between 2013 and 2018 to almost 45 million journeys a year.
• Germany is Austria’s single most important inbound market, accounting for 48% of international arrivals in 2018. The Netherlands and Switzerland are the next-biggest originating markets.
• The number of Chinese visitors is expected to increase 7% per year through 2023, outpacing growth in arrivals from other markets.
• Italy is the most popular destination for Austrian travelers, with a 24% share of overnight trips in 2018. Germany follows with 13%, and Croatia and Hungary each make up 9%. Travel to these destinations is expected to increase 0% to 3% per year through 2022.
• Lufthansa Group, including local subsidiary Austrian Airlines and low-cost division Eurowings, dominates air travel. Across Austria’s six main airports, its departure share ranges from 50% at Innsbruck to 100% at Linz.
• Competition intensified in Vienna last year with the launch of low-cost operations by Laudamotion and Level.
• Air travel demand increased by 4.5% in 2017, well above the 1% to 2% growth of recent years. The Salzburg and Innsbruck markets saw some of the strongest growth.

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• Demand for hotel accommodation in Austria increased 10% between 2013 and 2018, rising from 86 million room nights to almost 95 million.
• International travelers dominate demand, typically accounting for around three-quarters of hotel business.
• Through 2023, annual growth in room demand is forecast to remain modest at around 2% per year.
• German travelers account for more than half of international demand. The Netherlands is the only other significant source of demand, with a 10% share.
• Growth in demand from both countries is predicted to be weak through 2023. Austrian hotels can expect a more significant increase in rooms taken by travelers arriving from Poland and China, whose numbers will increase by 8% to 9% a year through 2023.
• Chain hotels account for 14% of the 1,720 properties currently operating in Austria.
• With 36 hotels, AccorHotels offers the largest portfolio. It operates in all service tiers, although most properties are in the midscale (ibis/ibis Styles) and upper midscale (Mercure) tiers. Local operator Austria Trend is the market’s second-biggest chain, operating 25 hotels.
• Average daily rates (ADRs) should move within a 0% to 2% range in 2019, according to BCD Travel’s Industry Forecast.