Five years after the Covid pandemic brought Austria’s tourism industry to a standstill, travel has not only recovered but, in some cases, surpassed pre-pandemic levels, according to the Austrian Institute of Economic Research (Wifo).
While business travel across Europe has waned, Austria has seen a surprising uptick.
Travel Appetite Stronger Than Expected
At the height of the pandemic, there were fears that “all businesses would go under” or that “people would travel less even after the pandemic,” says Oliver Fritz, a tourism expert at Wifo. Instead, demand has rebounded sharply, with Austria’s tourism sector proving “quite resilient.”
Government intervention played a key role. From April 2020, authorities provided substantial financial aid, preventing widespread closures. However, not everyone is convinced it was all money well spent.
“The support was certainly generous – the criticism that there was over-subsidisation is not entirely unjustified,” says Fritz. “We saved a lot of businesses, including some that might have gone bankrupt in the coming years anyway, and others that would have survived without help.”
He notes that, in some cases, hotel financial statements appeared healthier during the pandemic than they do now.
Did Government Support Go Too Far?
The urgency of the crisis meant financial aid had to be distributed quickly, making it difficult to target only those in genuine need.
“Funds had to be paid out very quickly – it’s extremely difficult to be precise in such cases,” says Fritz. In hindsight, he believes Austria could have reined in support sooner. “A lot of over-subsidisation happened through turnover replacement, which was then discontinued in January 2021.”
Austria Stands Out From the Rest of the EU
Despite the pandemic and subsequent economic headwinds, Austria’s travel industry has rebounded at a pace not seen in most other European countries.
“We have noticed that Statistik Austria reported an incredible recovery in travel for 2023, and even for 2022. This appears to be a uniquely Austrian phenomenon – it isn’t reflected in most other European countries,” says Fritz.
Holiday travel across the EU is only just returning to 2019 levels, but people from Austria are already travelling more than before the pandemic.
Pandemic Accelerated Existing Shifts
While Covid transformed many aspects of daily life, Fritz argues it mainly accelerated trends that were already in motion.
“The pandemic wasn’t the reason online meetings became popular, but it gave a push to a development that was already underway,” he explains. The same applies to holiday rentals, which saw a surge during lockdowns as people sought isolation.
Economic pressures are now adding another layer of complexity.
“We’ve had inflation, war, and now we’re in a recession,” says Fritz. “A lot has happened at once, all of which has likely had a significant impact on how people travel.”
Yet, despite rising costs, people are reluctant to forgo their holidays altogether. “People still want to travel – but they may be more cautious about how much they spend,” he says.
