UniCredit Bank Austria analysis:
Tourism made strong comeback, but price-adjusted revenue significantly underperformed 2019
- Overnight stays in Austria in 2023 approached pre-pandemic record levels at 151.2 million
- Nominal tourism revenue for 2023 reached EUR 30.8 billion, some 12.6% higher than previous high in 2019
- Real tourism revenue for 2023 undershot pre-pandemic levels by 13.5% owing to strong price increases
- Only Vienna saw real tourism revenue for 2023 exceed 2019 revenue; Tyrol saw strongest price-adjusted decline
- Average tourist expenditure per night exceeded EUR 200 for first time in 2023
"The Austrian tourism sector recovered again very quickly after the pandemic, achieving a remarkable comeback in 2022 and 2023. While the number of overnight stays in 2023 almost matched the record level of 2019, revenue from tourism far exceeded the result achieved in 2019", says UniCredit Bank Austria Chief Economist Stefan Bruckbauer, adding: "Given the strong price increases, however, the price-adjusted revenue from tourism was 13.5% below the level seen in 2019. Austria hosted almost as many tourists last year as it did prior to the pandemic, and their spending also increased significantly. In real terms, however, significantly fewer services were available and ultimately there was less scope for the domestic tourism industry to generate real growth despite record revenue."
Overnight stays in 2023 almost at record high from 2019
Following the pandemic-induced slump, the tourism sector in Austria began to make a strong comeback. The increase in overnight stays of more than 70% in 2022 was followed by further double-digit growth in 2023. The number of overnight stays increased to 151.2 million, which is just 1.5 million or 1% below the all-time record level achieved in 2019. While the gap to the 2019 record figure was noticeably higher in Lower Austria (-4.4%) and Tyrol (-3%) in particular, the majority of the federal states achieved new records for overnight stays in 2023. In Styria, the number of overnight stays in 2023 was an impressive 3.3% above the 2019 value at 1.37 million.
New record tourism revenue
"A new record was achieved in 2023 for nominal revenue from tourism. At EUR 30.8 billion, Austria generated almost EUR 3.5 billion or 12.5% more revenue than in the previous record year of 2019. We estimate that all federal states generated higher revenue from tourism in 2023 than they did in the previous record year of 2019", says UniCredit Bank Austria Economist Walter Pudschedl.
The result was highly dependent on the respective guest structure in the federal state. Tyrol had the highest tourism revenue at an estimated EUR 9.4 billion, equating to more than 30% of the total for Austria. Although this put revenue from tourism in Tyrol around EUR 500 million higher than in 2019, the 5.5% increase was the lowest of all the federal states. The federal capital of Vienna saw the biggest increase in revenue compared to the previous record year of 2019 at more than 30%, fuelled by the renewed attractiveness of urban tourism. Styria and Upper Austria also saw unusually high growth compared with 2019, rising respectively by almost 19% to EUR 2.8 billion and more than 15% to EUR 1.8 billion.
Price-adjusted tourism revenue lower than in 2019
The increase in total revenue must be considered in the context of the high inflation in the tourism sector. In price-adjusted terms, revenue in 2023 was 13.5% lower than in 2019, as prices in the accommodation and restaurant product group in Austria rose by 30.1% during this period; this is significantly higher than the general inflation rate of 22%. Real revenue from tourism did increase by 4.5% on the previous year in 2023, with nominal revenue increasing by around 17% and the price of tourism services increasing by 12.2%.
"Due to the high price increases, however, the record spending by tourists in 2023 was actually lower in real equivalent terms. In the individual federal states, only in Vienna was the nominal increase in tourism revenue sufficient to counteract real losses when compared to 2019. In all other federal states, there were sharp real revenue declines compared to the pre-pandemic period. The declines were particularly strong in Tyrol at 19% and in Salzburg at 15%", says Pudschedl.
Significant shifts in daily spending
"With total tourism revenue rising by 12.5% since 2019 and the number of overnight stays in 2023 remaining around 1% below the record year, the revenue per overnight stay increased significantly to an average of EUR 204. Austrian tourists were a little more frugal than foreign visitors", says Pudschedl. Spending per overnight stay by foreign tourists increased by more than 14% to an average of EUR 207. Spending per overnight stay by Austrian tourists rose by 12.4% compared to 2019, to EUR 194.
Taking into account inflation during this period, there was a significant decline in the real daily expenditure of tourists in Austria. "The average nominal expenditure per overnight stay of tourists from all countries in 2023 was EUR 204. This equates to a price-adjusted figure of only EUR 157 for 2019. This means that real spending per overnight stay was 12.6% below the record result for 2019, but this did not apply to tourists from all countries", says Pudschedl.
The decline in tourism revenue from guests from China (down 21.7%) and from Türkiye (down 26%) was particularly strong. However, visitors from Germany, who were responsible for the most overnight stays in Austria at 57.4 million (an increase of 750,000 on 2019), also spent significantly less in real terms in Austria than in 2019. Average spending per overnight stay fell from EUR 163 in 2019 to just EUR 140 (at 2019 prices) in 2023.
Considerably more tourists visited Austria from Germany in 2023. On average, their spending per overnight stay was higher, but the real equivalent value was less due to inflation. This development is likely due to the trend towards cheaper accommodation. In order to be able to enjoy a holiday after the pandemic despite having less purchasing power, visitors were clearly prepared to make compromises on the quality of the accommodation.
While this approach appeared to be the norm for all visitors from Western and Southern Europe, those from Eastern Europe were happy to spend. Tourists from Romania, Poland and Croatia, for instance, also increased their daily expenditure in real terms compared to 2019. This trend could be linked to free passage for cross-border shopping trips being possible once again, in some cases without an overnight stay.
Further information can be found at:Tourism comeback — like a phoenix from the ashes?, UniCredit Bank Austria, May 2024
Enquiries:
UniCredit Bank Austria Economics & Market Analysis Austria
Stefan Bruckbauer, Tel.: +43 (0)5 05 05-41951;
Email: stefan.bruckbauer@unicreditgroup.at