Exciting Opportunities Await Vienna’s Hotel Industry

Amidst a global recovery in tourist demand, Vienna’s hotel market has shown promising signs of resurgence. Although the lingering impact of international travel restrictions weighed on the city’s tourism sector in the first half of 2022, the latter half of the year witnessed notable improvements.

A comprehensive market analysis conducted by hotel specialist Christie & Co sheds light on the dynamics of supply and demand, highlighting the resilience of certain hotel categories amid the crisis.

As per data from the Vienna Tourist Board, the city recorded a total of 13.2 million overnight stays throughout 2022, representing approximately 75 percent of the peak demand witnessed in 2019, which stood at 17.6 million overnight stays.

Notably, a positive trajectory was observed particularly in the latter part of 2022. The total of 8.2 million overnight stays in the second half of the year marked a difference of merely 1.4 million from the figures recorded in 2019.

With the easing of travel restrictions in key markets such as China – which was the fastest-growing origin market prior to the pandemic – there is optimism that this gap could be swiftly narrowed.

The encouraging trends in Vienna’s hotel sector extend beyond increased tourist numbers, reflecting a deeper engagement from visitors.

Notably, the average length of stay has shown a positive uptick, rising from 2.23 days in 2019 to 2.36 days in 2022. This prolonged stay duration coincided with the return of international travelers, marking a significant step towards the normalization of tourism in the city.

In terms of visitor demographics, domestic arrivals accounted for 37 percent of total arrivals in 2022, with international visitors comprising the remaining 63 percent.

Among the international contingent, Germany emerged as the leading source market, contributing to 27 percent of all arrivals. Following closely behind were the United States at 8 percent, Italy at 6 percent, and Spain at 5 percent, illustrating a diverse array of origins for Vienna’s visitors.

Interestingly, while certain source markets contributed significantly to overnight stays and arrivals, they exhibited relatively lower spending on accommodations.

Notably, visitors from the United Arab Emirates and the USA were among the top spenders, with an average expenditure of €97.8 and €92.5 per person per night, respectively.

These insights underscore the dynamic nature of Vienna’s tourism landscape, where varying travel patterns and spending behaviors shape the hospitality sector’s performance.

Despite facing challenges stemming from the pandemic, Vienna’s hotel sector exhibited resilience and adaptability, showcasing promising signs of recovery.

Although the year-round occupancy rate of 58.7 percent trailed behind 2019 figures by 21.5 percentage points, local hoteliers managed to offset this decline by increasing the average room rate by a notable 18.2 percent, reaching €109.2.

Of particular interest in the report was the analysis of revenue per available room (RevPAR) across different hotel categories.

Notably, luxury and budget hotels demonstrated remarkable resilience, surpassing their 2019 RevPAR figures during the latter half of the year. Specifically, 5-star hotels recorded an impressive 19.9 percent increase, while 1-star and 2-star hotels experienced an 11.3 percent growth compared to 2019.

However, the 3-star and 4-star categories still faced challenges, reporting declines of 8.6 percent and 3.5 percent, respectively, in comparison to pre-pandemic levels.

Despite these fluctuations, the overall market witnessed a positive trajectory, with the RevPAR reaching a new all-time high of €102.3 in December 2022.

This milestone underscores the industry’s ability to navigate uncertainty and adapt to evolving consumer preferences, positioning Vienna’s hotel sector on a path towards sustained recovery and growth.

The opening of new luxury hotels like Rosewood in August 2022 has undeniably bolstered Vienna’s allure as a premier destination for discerning travelers.

With the recent addition of Rosewood and the upcoming reopening of The Amauris (formerly The Ring Hotel) and the debut of Almanac Vienna slated for mid-March, there’s anticipation surrounding whether the positive momentum in the luxury segment will persist.

Manuel Strasser, Consultant for Investment & Letting, expressed optimism about the impact of these developments, noting, “It will be exciting to see if the rate increase in the luxury segment can be continued.”

The introduction of these upscale accommodations reflects Vienna’s commitment to enhancing its hospitality offerings, further solidifying its position as a top-tier destination for luxury travelers.

Simon Kronberger, Director for Austria & CEE, echoed this sentiment, highlighting Vienna’s exceptional reputation and the ongoing investments made by local hoteliers to enhance their offerings.

He remarked, “Viennese tourism will continue to write its success story again, and new record figures can be expected soon.” This optimism underscores the resilience of Vienna’s tourism industry and its ability to rebound from challenges, poised for sustained growth and success.

As a leading player in the hospitality sector, Christie & Co plays a pivotal role in shaping the industry landscape. With a portfolio spanning over 20 hotels in Austria and more than 300 across Europe, the company provides comprehensive services including transaction support and consultancy, empowering hotel owners to maximize their property’s potential and drive success in an ever-evolving market.

Jann Confield
Jann Confield
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