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17 October 2019 | Hotels

Hotel Market Vienna: Continuous growth in demand on the Danube

Vienna. As the largest city in Austria and the sixth largest in the European Union, Vienna is both an important cultural and economic location and the most liveable city in the world. Thanks to numerous leisure tourism demand generators as well as international corporations and trade fairs, the metropolis on the Danube benefits from a balanced business leisure mix. According to the latest analysis by hotel property specialist Christie & Co, Vienna's steadily growing popularity is reflected in a strong improvement in performance.

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Vienna is one of the most popular leisure destinations in Europe due to its numerous sights, such as the UNESCO World Heritage listed city centre and Schönbrunn Palace. At the same time, the city attracts business travellers looking to attend one of the many internationally important trade fairs and events and it is also home to more than 300 Eastern Europe headquarters of international companies. This leads to stable demand for hotels throughout the year (except for the historically weak beginning of the year) and according to Christie & Co’s latest analysis, the hotel market has recorded positive development in recent years. Since 2014, the number of overnight stays in hotels has risen by a total of 16.6 per cent, setting a new record in 2018, with around 14.3 million overnight stays.
 
Room occupancy in Vienna’s hotels has grown continuously over the past 5 years and reached a peak of 78 per cent in 2018. The average net room rate also recorded a general upward trend, although a decline was registered in 2016 and 2017, primarily as a result of the three per cent VAT increase as of 1 May 2016. Due to the cancellation of this act on 1 November 2018, however, the market recovered rapidly and in 2018, with an ADR of approx. 102 €, exceeded its previous record high from 2015. “The RevPAR recorded a positive development over the period under review, driven by occupancy and rate, respectively,” reveals Ricky Bichel, Consultant Advisory & Valuation Services of Christie & Co. Overall, the RevPAR has improved by c. 14 per cent since 2014 to € 80 in 2018. “The key figures for the first half of 2019 promise continued positive prospects thanks to a successful ball season,” continues Bichel.
 
“It seems that this positive trend in performance has not gone unnoticed by hotel project developers either,” explains Bichel. Following a decline in the number of hotel establishments opened in recent years, around 36 hotel openings are expected by 2023, which will increase the number of rooms by around 19 per cent. Among the hotels under construction are an 822-room flagship hotel of the brand The Student Hotel (2nd district) and a Jaz in the City Hotel of Deutsche Hospitality (165 rooms, 6th district). “We are particularly looking forward to the Austrian market entry of the luxury brand Rosewood. The 99-room luxury hotel is scheduled to open in 2022 and will boost the luxury hotel market in Vienna. Overall, it remains exciting to see whether the strong performance of the first half of 2019 will continue despite the expected supply expansion,” concludes Bichel.