Domestic Tourism with Good Booking Situation and Weak Profits

According to the Tourism Barometer 2025 by Deloitte and the Austrian Hotel Association (ÖHV), numerous tourism companies have achieved revenue growth in the last two financial years, but the profitability of the majority has deteriorated. The survey shows that declining profits and economic uncertainties are troubling the businesses.

Domestic tourism with cautious prospects for the summer

According to the information, profitability is suffering due to increased personnel, energy, and goods costs, as well as the generally high tax burden. In particular, the collective wage and salary increases of the past two years could not be fully passed on to the guests, emphasize the business consultant and the hotel industry association. The prospects for the summer are described as "cautious" according to the Tourism Barometer. 40 percent of the more than 200 businesses that participated in the survey fear a further deterioration of the financial situation. "The general economic situation of the tourism industry is rated by the entrepreneurs with an overall score of 3.06 - this is a significant deterioration compared to the previous year and shows an increasingly pessimistic basic mood," explains Andreas Kapferer, partner at Deloitte Tirol. "And this, even though demand has returned to pre-pandemic levels."

The hotel association sees it the same way: "The booking situation at Austrian businesses is finally pleasing again, but the sharply increased cost burden is more than a bitter pill," emphasizes ÖHV Secretary General Markus Gratzer. It brings many companies to their economic limits. For the increase in guest numbers to also reflect in profits, according to Kapferer, there needs to be increased efficiency improvements and strategic pricing by the companies, but above all "appropriate framework conditions from politics." This is required to counteract inflation and the associated cost increases. Unnecessary bureaucratic hurdles must also be reduced. "Good overnight numbers alone are worthless if no money remains in the account at the end."

Slowed investments in domestic tourism

According to the information, tourism businesses are postponing planned repairs and investments or even canceling them altogether: 42 percent of the companies have reduced originally planned projects, and another 35 percent plan restrictions in the next five years. Additionally, it has become more difficult for almost half of the respondents to obtain credit financing. In a capital-intensive sector like the hotel industry, this is fatal. "Short-term cost reductions are dangerous - because those who permanently save on maintenance and development risk a downward trend that can have a long-term negative impact on the offer and competitiveness," warns Gratzer.

Preferences vary in external financing. A large part of the businesses (39 percent) that have taken out loans in the past two years rely entirely on variable interest rates according to the current Tourism Barometer - probably in anticipation of low interest rates. Just under a quarter (23 percent) prefer fixed interest rates, while 38 percent have chosen mixed financing. More than a third (36 percent) of borrowers in tourism have already been asked by their banks to provide higher securities.

(APA/Red)

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