The pandemic has disrupted the global economy in myriad ways, but the Austrian tourism sector has been particularly affected: Normally a €2.3 billion (2019) industry that serves an average of 43 million international tourists annually, revenues in the sector have come to a grinding halt.
While last summer brought us a sense of relative normalcy, many in the industry hoped for some sort of winter season, but lockdowns and border controls dashed even the most modest expectations, with Vienna and Austria’s western ski resorts particularly affected.
The Austrian Institute of Economic Research’s (WIFO) latest analysis of the 2020/21 winter tourism season revealed that compared to 2019, arrivals were down by 93.6%, causing a 90% decline in revenue excluding financial support from the state. As for this year, new COVID strains have made projections unpredictable.
Still, with tourism comprising 5.9% of Austria’s GDP, a way forward is sorely needed. As one of its biggest advocates, Austria is heavily banking on the EU’s “Digital Green Pass” for the upcoming summer season, an app confirming an individual’s COVID-19 vaccination that would replace testing and simplify safe cross-border travel within the union. Austria’s Minister of Sustainability and Tourism, Elizabeth Köstinger, has therefore spearheaded efforts for all 27 EU member states to define the final tourism priorities for the Green Pass. “This is a great success for our Austrian initiative and an important further step towards a uniform Green Pass throughout Europe in summer,” Köstinger hopes. The draft will be voted upon by the EU Parliament in its next session on Apr 26. “I will keep up the pace so that the Green Pass is ready for use throughout Europe in the summer” she promised.
This would be a shot in the arm to the beleaguered industry, where WIFO experts estimate that pre-2020 numbers can only be expected to return in 2023.
With a general reopening planned for May 19, hotels are optimistic that international tourists could return by mid-June, resulting in occupancy rates reaching up to 51% of 2019 levels. In addition, they expect an influx of domestic vacations this summer – particularly in the countryside. “People want to leave their homes as soon as they can. They will want to travel with their families – especially for summer break. And families want convenience.” said Rosa da Silva, procurator of the Austrian hotels in the Gorgeous Smiling Hotel Group. With much uncertainty still surrounding the Green Pass, Da Silva predicts that many will opt to holiday in their home countries, avoiding the scrutinizing process of crossing borders – especially families, which are generally comprised of different age groups. To her, “the Green Pass will only create a divide between vaccinated and unvaccinated family members.”
Reopening may not be the end of it: Tourism expert and senior economist at WIFO, Oliver Fritz, revealed on radio Ö1 that the industry may face a wave of bankruptcies in the future when bridge loans will have to be repaid. Da Silva concurs that aid payments have helped the industry survive, but “current financial support from the state is due to end in June. I hope that the government will come to realize that realistically, they need to extend aid until the end of the year, especially for hotels in the city.” Although we all appreciate a less crowded 1st district, the pandemic’s strain on the Austrian Tourism sector has been severe, and the hard times are far from over.