Tourism is booming, but consumers are saving: the economy will suffer in 2024!

Tourism is booming, but consumers are saving: the economy will suffer in 2024!

Domestic tourism will show a mixed outcome in 2024. According to an analysis by the Economic Research Institute (WIFO), the number of overnight stays increased by 2.1 percent, while arrivals even increased by 3.3 percent. Despite this quantitative progress, tourism has a dampening effect on overall economic development. Real gross value added in accommodation and catering fell by 3.9 percent, while the overall economy shrank by 1.4 percent. This means that the tourism sector did not act as an economic driver, but rather as a slight brake on the economy.

In 2023, the number of overnight stays in 2019 was exceeded for the first time, but the economic perspective of the sector remains below average. Walter Veit, President of the Austrian Hotel Association, identifies the current figures as a “clear mandate for action” and emphasizes that more guests are arriving in Austria, but are noticeably more economical with their spending.

Development in the winter season 2024/25

The 2024/25 winter season is ambivalent. Guest arrivals from November to March rose by 0.8 percent to 17.8 million, while overnight stays fell slightly to 64.1 million. This decline is distorted by calendar effects, particularly the leap day in February and the different location of the Easter holidays. Without these effects, there would have been an increase in overnight stays of 4.7 percent.

Domestic tourism is once again proving to be a stable pillar: overnight stays by domestic guests increased by 0.6 percent from November 2024 to March 2025, while foreign demand fell by 1.0 percent. The high price increase in catering and accommodation, with a price increase of 6.0 percent and 5.5 percent respectively, is dampening the development of real income.

Looking into the future

The simulation for the last month of the winter season predicts a strong increase in demand in April to offset the weak result in March. A total of around 72.0 million overnight stays are expected for the entire 2024/25 winter season, which means an increase of 1.3 percent compared to the previous year. Nevertheless, this is a decrease of 1.2 percent compared to the 2018/19 season.

A stable development of overnight stays at a high level is forecast for 2025, with around 154.6 million overnight stays, which corresponds to an increase of 0.2 percent compared to 2024. Despite consumers' high desire to travel, spending is expected to be restrained, mainly due to economic uncertainties in Austria and Germany. These factors make the anticipation of future tourism developments appear ambivalent.

Overall, tourism increased in volume in 2024, but at the same time it also contributed to economic uncertainty. A clear mandate for the industry itself is necessary in order to respond to the challenges and remain viable for the future. The analogous connection between tourism and business will therefore remain a central theme for the coming years.