Sectoral Analysis by the Bank Austria Economics Department:
Enthusiasm for Travel Recovers Only Slightly in 2010
- In 2009 Austrian tourism saw receipts fall by 3 percent but regained market shares
- In 2010 tourism demand will remain weak and receipts will again fall by about 2 percent
- The tourism industry will remain competitive in future and will achieve relatively high growth rates, nevertheless, further losses of market share are unavoidable
After four years of strong growth, the success story of Austrian tourism came to an end in 2009. In a year dominated by recession, weak, and in some cases, falling consumer demand, reduced willingness to travel in almost all important source markets. This is one of the main conclusions of the latest sectoral analysis by the Bank Austria Economics Department. Despite this, Austrian tourism reported a satisfactory result in an international comparison with demand falling by just under 1 percent and receipts by approximately 3 percent to EUR 22 billion. In fact, Austria was actually able to win back shares of the global tourist flow.
"Overall, the number of journeys decreased significantly. However, many long-haul holidays were replaced by shorter trips to short-haul destinations", said Bank Austria economist Günter Wolf, "In this environment, the domestic tourism sector's focus on nearby target markets and on Austrian holidaymakers is an important competitive advantage." In 2009 international guest arrivals decreased by just 2.6 percent, a moderate loss in an international comparison. Worldwide the number of international guest arrivals fell by 4 percent, in Europe by approximately 6 percent. Nevertheless, the balance in 2009 remained negative with the number of Austrian and foreign guests falling by just under 1 percent, overnight stays by 2 percent and receipts from tourism by 3 percent.
However, only a weak recovery is expected in the tourist industry in 2010. The first results for the winter season ending in April confirm expectations that Austria's travel receipts will again shrink slightly by some two percent in nominal terms this year. The sector is feeling the effects of the probable falling off in demand from foreign guests caused by the weak economic recovery in Western Europe. Above all, there is a lack of demand from Germany. "In the most important target markets, income, consumer demand and subsequently the urge to travel are not expected to rise again until 2011, in turn leading to a slight increase in Austrian tourism receipts", said industry expert Wolf.
While international tourism is rapidly returning to its earlier growth rate of 3 to 4 percent more guest arrivals per year, the recovery in Europe and Austria will be somewhat weaker. Even if Austria continues to lose shares of the international guest flow, the country will remain one of Europe's most popular tourist destinations. "Tourism in Austria is one of those sectors that registers higher than average growth", said the author of the study Günter Wolf, "In a long-term comparison, both the number of employees and added value have risen faster than in the economy as a whole." The sector is competitive. It has an almost unique product range and, moreover, has adapted it extremely successfully to changing demands. Thus the successive improvement in quality has gone hand-in-hand with an improved price-performance ratio with demand for higher quality and receipts per overnight visit also rising. Ultimately, the utilisation of accommodation capacity has been improved without any significant reductions having to be made. After all, while the number of accommodation establishments has fallen by almost 40 percent to 17,000 in the last 25 years, the number of beds has only decreased by 9 percent. Thus occupancy rates have risen from their record low of 29 percent in the mid 1980s to 37 percent in 2009.
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