1. Do more beds bring in more guests?
STUDY
Austrian Hotel Association (ÖHV)
Vienna, January 2011
1
2. The Austrian Hotel Association and Roland Berger have enjoyed a
successful partnership since 2005
Joint studies by the ÖHV and Roland Berger
2005 2007 2008 2009 2011
ÖHV Destination Feasibility analysis Austria looks to Success factors Do more beds
study VII – for an "Austrian Central and and best practice bring in more
Investment tourism strategy – Eastern Europe as in destination guests?
analysis ÖTS
ÖTS" a promising source management
of tourism and
hotel business
2
5. 2010 was another successful year for tourism in Austria – The
country continues to be one of the top destinations worldwide
Top 15 tourism destinations in the world – International arrivals
World mkt.
Rank 2006 2007 2008 2009 20101) share2) [%] COMMENTS
1 FRA FRA FRA FRA FRA 8.1 • Compared to other countries,
2 ESP ESP USA USA USA 6.5 Austria continues to be one of the
3 USA USA ESP ESP CHN 6.0
60 most popular vacation
p p
destinations in the world. It
4 CHN CHN CHN CHN ESP 5.6 attained its highest ranking (7th
5 ITA ITA ITA ITA ITA 4.7 place) in 2003
6 GBR GBR GBR GBR GBR 2.9
• Even as other, larger countries
7 DEU DEU DEU TUR GER 2.9 have surpassed Austria, the
8 MEX UKR UKR GER TUR 2.9 country has retained its share of
9 AUT TUR TUR MYS3) MYS3) 2.6 the world tourism market – about
2.3% – for five years, making it
10 RUS MEX MEX MEX MEX 2.3
11th worldwide
11 UKR MYS3) MYS3) AUT AUT 2.3
12 TUR AUT AUT UKR UKR 2.2
13 CAN RUS RUS RUS HKG 2.2
14 MYS3) CAN CAN HKG RUS 2.1
21
15 GRC HKG HKG CAN CAN 1.7
1) Forecast 2) Current value 3) Malaysia
Source: UNWTO; Roland Berger 6
6. For years, the tourism sector has constantly contributed over 15% to
GDP, generating over EUR 40 bn with approx. 180,000 employees
Value added by the tourism and leisure industry in Austria [EUR bn]
No. of COMMENTS
employees3) 168 169 180 179 1822)
['000]
• The tourism sector has generated
Share of over EUR 40 bn for several years,
15.3 15.0 14.9 15.2 15.11) making it one of Austria's most
g
GDP [%]
important industries
42.2 41.8 42.8 • In terms of FTEs, the tourism
39.2 40.7
industry employs more than
180,000 people. Due to the
seasonal nature of tourism work,
this number is at times much
higher
2006 2007 2008 2009 20101)
)
1) Forecast
2) As at September 2010
3) Average employment over 365 days; yoy comparisons no longer possible starting in 2008 because of ÖNACE reorganization
Source: Statistics Austria; WKO; AMS 7
7. It's also encouraging that per capita spending by the most
important foreign visitors has increased faster than inflation
Development of daily per capita spending of visitors from Germany1) [EUR]
3.2 COMMENTS
2.2
Inflation 1.5
Avg. 1.9 • Austria continues to attract visitors
rate [%] 0.5 with purchasing power
• German tourists who make up
tourists,
CAGR +4.2% about half of all overnight stays in
Austria by foreign visitors, spent
EUR 120 per person per day in
120 120 the 2008/2009 season
106 106
• The rise in visitor spending
considerably exceeds the average
Austrian inflation rate
• This phenomenon is connected to
p
shorter stays (2000: 5.2 days,
2009: 4.6 days) – to experience
more in this shorter amount of
time, German visitors spend more
money
2006 2007 2008 2009
1) Survey was conducted over the 2006/2007 and 2008/2009 winter holidays
Source: T-MONA guest survey with full-year data for 2006/2007 and 2008/2009; Statistics Austria 8
8. The euphoria is also reflected in the number of hotel beds – 16,000
beds are to be added over the next five years
Development of the no. of beds in hotels and similar accommodations1) – Austria ['000]
COMMENTS
• After bottoming out in 2003, the
650 CAGR +0.5% supply of beds in hotels and
similar accommodations reached
CAGR 0% 2000-levels again in 2009
606
600 603
593 596 • Starting in 2009, the number of
600 588 587 588 590
580 beds is expected to increase by
569 566 571 571 573 574 0.5% each year. In the coming five
years, another 16,000 hotel beds
are to be added
550
• The forecast is based on
announced and ongoing
expansion plans plus regression
analyses for 2000-2009
0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Forecast
1) Similar accommodations = pensiones, inns
Source: Statistics Austria; ÖHV; press research, Roland Berger 10
9. The success of Austrian tourism is recognized abroad – The WEF
named Austria the world's 2nd most attractive tourist destination
Travel & Tourism Competitiveness Index, 2007-2009
Rank2)
) COMMENTS
No. of points1)
Country 2009 2009 2008 2007
• The quality of Austrian tourism is
well-known abroad
Switzerland 5.68 1 1 1
Austria 5.46 2 2 2 • Since the Travel & Tourism
Competitiveness Index was
Germany 5.41 3 3 3 launched in 2007, the World
France 5.34 4 10 12 Economic Forum has consistently
named Austria as the world's
world s
Canada
C d 5.32
32 5 9 7 second most attractive country
Spain 5.29 6 5 15
• But the competition is stiff: direct
Sweden 5.28 7 8 17 competitors such as Switzerland,
USA 5.24
5 24 8 7 5 Germany and Italy have held their
Australia 5.24 9 4 13 positions unchallenged for years
UK 5.22 10 16 10
… … … …
Italy 4.78 28 28 33
1) On a scale of 1 to 7 (7 = best, 1 = worst) 2) 133 countries analyzed
Source: World Economic Forum's Travel & Tourism Competitiveness Report 11
10. Austria receives top marks for its tourism infrastructure, but
earned its worst rating in price competitiveness
Travel & tourism subindices – Austria, 2009
Rank1) Indicator No. of points COMMENTS
1 Tourism infrastructure 7.0 • Taking a closer look at the various
5 Health and hygiene 6.9 indices, two in particular stand out:
6 Safetyy 6.5
– In the "Tourism infrastructure"
Tourism infrastructure
9 Environmental sustainability 5.6 subindex, Austria is number
10 Land transportation infrastructure 6.0 one in the world
11 Cultural resources 5.8 – Austria's worst showing was in
14 Prioritizing of travel and tourism 5.6
56 the "P i
th "Price competitiveness"
titi "
16 Education and training 5.8 subindex
18 Human capital 5.7
23 Affinity for travel and tourism 5.4
23 Information + telecomm. tech. infrastructure 4.8
26 Air travel infrastructure 4.5
28 Laws and regulations 5.1
40 Natural treasures 4.1
118 Price competitiveness 3.8
1) Out of 133 countries
Source: World Economic Forum's Travel & Tourism Competitiveness Report 12
11. Regarding hotel coverage, Austria is in third place with 3.5 rooms
per 100 inhabitants – Behind Cyprus and Malta
Hotel coverage: No. of hotel rooms per 100 inhabitants, 2009
Tour
Tour- COMMENTS
ism
sector's
share of 21.4 23.0 15.4 17.2 13.3 40.7 17.2 9.7 12.0 12.6 8.6 10.9 9.2 • In terms of hotel
GDP coverage, Austria is in
[%] third place; only Cyprus
p ; y yp
5.6
56 and Malta, which have
4.9 hardly any other
economic sectors, offer
more rooms
3.5
35 3.3 • To compare: Italy is in 8th
2.8 place with 1.8 rooms per
2.3 100 inhabitants,
1.9 1.8 1.8 1.7 Switzerland is 10th with
1.1
11 1.0 1.0 1.7
1 7 rooms
CYP MLT AUT GRC ISL BRB ESP ITA BGR CHE DEU FRA GBR
Source: World Economic Forum's Travel & Tourism Competitiveness Report 14
12. Competitors such as Switzerland and Italy achieve prices that are
26% higher for hotels of the same quality
Hotel price index for first-class, branded hotels –
Compared to countries neighboring Austria [USD]1), 2009
COMMENTS
200.2 203.4
Difference: • Austria's 69th place in the hotel
-26% 164.7 167.4 price index puts it in the middle
149.4
149 4 149.7
149 7 154.8 of the international comparison
p
131.8 • Switzerland achieves an
average price of USD 200.20
104.8 for a double room in a first-
class hotel, Italy USD 203.40 –
in Austria it's just USD 149.70
• These results are especially
striking, considering that
Switzerland and Italy were
rated worse than Austria in
terms of their tourism
infrastructure (7th and 3rd
Slovenia Germany Hungary Austria Croatia Czech Slovakia Switzer- Italy place, respectively)
Rep. land
1) Avg. gross price per double room in first-class, branded hotels
Source: World Economic Forum's Travel & Tourism Competitiveness Report 16
14. Over the past ten years, the number of beds in Austria's top quality
accommodations has risen sharply
Development in the no. of hotel beds ['000]
COMMENTS
280 269
264
5-/4-star
260 252 • Quality lodgings (5- and 4-star
247
242 accommodations) in particular
240 232 232 231 have seen massive growth in the
g
224
220 220 218 218 221
number of beds – over 30% in the
220 3-star last ten years. Further growth of
219 220 9% is forecast for 2010-2013
215 215 216 216 217 218
200 189 191 209
184 204 • The number of beds in
197 3-star accommodations has
180
decreased slightly (by 7%), while
the supply in 2- and 1-star
160 172 167 154 149
146 144 lodgings has gone down by 25%
140 138
140 133 130 • The forecast for 2010-2013 is
126
123 based on announced and existing
120 113 111
expansion plans
2-/1-star
100
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '101) '111) '121) '131)
1) Forecast
Source: Statistics Austria; ÖHV; Roland Berger 19
15. For years, the number of overnight stays increased faster than the
number of beds – Now both values are converging again
Supply and demand in 5- and 4-star accommodations [Basis = 2000, %]
COMMENTS
140
• Over the past few years, the
number of overnight stays in 5-
130 and 4-star accommodations
outstripped the number of beds
available by up to ten percentage
120 points ("demand-supported
growth")
110 • But in the last two years, the
curves have once again
Demand-supported Stagnation converged ("stagnation")
growth
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Supply: number of available beds Demand: number of overnight stays
Source: Statistics Austria 21
16. Urban accommodations are especially affected – Vacation
accommodations have developed more strongly
Beds available vs. no. of overnight stays in 5-/4-star accommodations in cities1) and in
vacation destinations [Basis = 2000, %]
Urban accommodations Vacation accommodations COMMENTS
150 150 • Despite the massive
increase in the number
140 140
of beds, vacation
accommodations have
developed more
130 130 strongly over the past
decade
120 120
• In the cities, the picture
110 is somewhat different:
110
whereas the supply of
beds increased slowly
100 100 but surely, demand
collapsed in 2008/2009
0 0
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09
Supply: no. of available beds Demand: no. of overnight stays
1) Defined as accommodations in the state capitals
Source: Statistics Austria; tourmis 22
17. Only in about 20% of all Austrian destinations did the supply of
beds decline or stagnate
Supply of beds in 5-/4-star accommodations by destination, 2004-2008
COMMENTS
Waldviertel
• 80% of all Austrian destinations increased Donau OÖ Weinviertel
their supply of beds Mühlviertel
Donau NÖ
• In roughly 20% of all Austrian destinations, the
number of beds has stagnated or declined Inn- and
Hausruckviertler
Linz
Wien
Donau NÖ
Thermenland
Wienerwald
Mostviertel Neusiedler See
Salzburger
Seenland Nationalpark
Region
city Salzburg
and environment
Vienna Alpen
Salzkammergut in NÖ
Alpbachtal and
Tiroler Kaiser-
Salzburger
Ferienregion Seenland Ferienland winkl
Saalachtal
Tennen-
Kufstein gau Schladming
Reutte Dachstein
Silberregion Hochsteiermark
Karwendel Wilder Lammertal,
Tannheimertal Achensee Piller-
Klein- Kaiser Tennen- Dachstein
Bregenzer- seetal
walsertal Tiroler Zugspitz gebirge
wald Saalfelden/ Ramsau
Arena Wild- Kitzbüheler Leogang Hochkönig's Schladming-
Mieminger Seefeld schönau Alpen Saalbach
Bodensee Bergreich Dachstein
Plateau Ferienregion Hinterglemm Schladming- Thermenwelt
Vorarlberg Lechtal Sonnen- Salzburger Oststeiermark
Imst- Hohe Salve pipemoos Burgenland
Zell am See terasse Sportwelt
Gurgltal Tirol Mitte
Ferienregion – Kaprun Ober-
Alpenregion Tirol Innsbruck + Region Nationalpark Groß- tauern
Bludenz West seine Hall Hohe Tauern Ferienregion Urlaubsregion Murtal
g
Zillertal arl-
l
Feriendörfer Nationalpark
Arlberg tal Graz and
Serfaus, Hohe Tauern Ferienregion Region Graz
Fiss, Stubaital Wipptal Gasteiner- Lungau
Montafon Paznaun tal
Ladis
Pitz- Katschberg
Tiroler tal Steirisches
Oberland Nationalpark Thermenland
Lieser-
Osttirol Region Hohe Maltatal
Tauern Nockberge, Lavanttal
Ötztal Carinthia Bad Kleinkirchheim
Süd- and West Styria
Oberes Drautal Millstätter-
see
Villach
Villach-
Carinthias Warmbad, Klagenfurt
Naturarena Faaker See, Wörthersee
Ossiacher
See Klopeiner See –
Carnica-Region Südkärnten
Rosental
Increase in beds >25% 0-25% <0% No comparison data available
Source: Statistics Austria; ÖHV; Roland Berger 23
18. As one would expect, the increase in the supply of beds meant that
the occupancy rate continuously declined
Supply of beds vs. occupancy in 5-/4-star accommodations [Basis = 2000, %]
COMMENTS
Beds
Avg. ['000]
55% 250
• Over the past
decade, the supply of
beds rose more than
200 30% and is about to
pass 250,000
50%
150 • At the same time, the
occupancy rate in
100 quality accommo-
45% dations is declining
steadily
50
40% 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Occupancy Beds
Source: Statistics Austria 24
19. Over a third of Austrian tourist destinations achieved less than 45%
capacity utilization in the prosperous year of 2008
Annual capacity utilization in 5-/4-star accommodations by destination, 2008 [%]
COMMENTS
Waldviertel
• Even in a prosperous year like 2008, over a third Donau OÖ Weinviertel
of Austria's tourism destinations reached an Mühlviertel
Donau NÖ
annual capacity utilization of just 45% maximum
Linz
• Capacit utilization is not calculated based on
Capacity tili ation calc lated Inn- and
I d
Hausruckviertler
Thermenland
Wien
Wi
Donau NÖ
days open but rather on full-year capacity Wienerwald
Neusiedler
Mostviertel See
Salzburger
Seenland Nationalpark
Region
city Salzburg
and environment
Vienna Alpen
Salzkammergut in NÖ
Alpbachtal and
Tiroler Kaiser- Salzburger
Seenland winkl Saalachtal Tennen-
Ferienregion Ferienland gau Schladming
Reutte Silberregion Kufstein Dachstein Hochsteiermark
Karwendel Wilder Lammertal,
Tannheimertal Achensee Piller-
Kaiser Tennen- Dachstein
Bregenzer- seetal
Tiroler Zugspitz Saalfelden/ gebirge
wald Wild- Ramsau
Klein- Arena Kitzbüheler Leogang
schönau Hochkönig's Schladming-
walser- Seefeld Alpen Saalbach
Bodensee Bergreich Dachstein
tal Mieminger Ferienregion Hinterglemm Thermenwelt
Vorarlberg Lechtal Sonnen- Salzburger Oststeiermark
Imst- Plateau Hohe Salve Burgenland
terasse Sportwelt
Gurgltal Tirolmitte Zell am See
Ferienregion Ober- Schladming-
Alpenregion Tirol – Kaprun
Region Nationalpark Groß- tauern pipemoos
Bludenz West Innsbruck + seine Hall Hohe Tauern Ferienregion Urlaubsregion Murtal
Zillertal arl-
Feriendörfer Nationalpark tal
Arlberg Graz and
Serfaus, Hohe Tauern Ferienregion Region Graz
Fiss, Stubaital Wipptal Gasteiner- Lungau
Montafon Paznaun tal
Ladis Katschberg
Pitz-
Tiroler tal Steirisches
Oberland Nationalpark
Lieser- Thermenland
Region Hohe
Osttirol Tauern Maltatal Lavanttal
Nockberge,
Ötztal Carinthia Bad Kleinkirchheim
Süd- and West Styria
Oberes Drautal Milstätter-
see
Villach-
Carinthias
C i hi Warmbad, Klagenfurt
Naturarena Faaker See, Wörthersee
Ossiacher
See Klopeiner See –
Carnica-Region Südkärnten
Rosental
Capacity utilization >55% 55-45% <45%
Source: Statistics Austria; ÖHV; Roland Berger 25
20. At the same time, some areas are seeing a downward price spiral –
Prices are often below those of 2009
Average yoy price development1) for 2010/2009, standard double room
5-/4-star accommodations in selected cities [%, Basis=2009]
COMMENTS
Vienna: 5-star hotels 5%
Vienna: 4-star hotels -2% • The travel and booking platforms
Innsbruck: 5-star hotels
5 star 7% make it possible to compare offers
and create price transparency
Innsbruck: 4-star hotels 0%
• Compared to 2009, the prices in
Linz: 4-star hotels -10% 2010 have often not reached the
Salzburg: 5 t hotels
S l b 5-star h t l 9% previous year s level Especially 4-
year's level.
star accommodations were hit by
Salzburg: 4-star hotels 2% cutthroat competition
Graz: 5-star hotels -9%
Graz: 4-star hotels
G 4 t h t l -3%
3%
Klagenfurt: 5-star hotels -3%
Klagenfurt: 4-star hotels -6%
Bregenz: 4-star hotels
B 4 t h t l -2%
2%
1) Average values from January to November, as far as data was available
Source: Trivago; Roland Berger 26
21. The risk to a company's existence is evaluated based on two
criteria: debt repayment period and equity ratio
Excerpts from the Austrian Reorganization Act
According to the Reorganization Act (Unternehmensreorganisationsgesetz,
or URG), there are two criteria that determine whether a company is in
jeopardy:
1 The debt repayment period is over 15 years
2 The equity ratio is below 8%
Source: Österreichische Hotel- und Tourismusbank 28
22. Half of the hotels supported by Österreichische Hotel- und
Tourismusbank (ÖHT) have repayment periods that are too long
Selected operating KPIs of 5-/4-star accommodations1), 2009
Debt repayment period COMMENTS
Hotel operations • More than half of the hotels
>25 0-8 analyzed [no.] supported by the ÖHT do not
years years meet the URG criterion f
t th it i for
25% 25% debt repayment period
267
• A quarter of hotel operations
have repayment periods
h t i d
longer than 25 years
25% 25%
16-25 8-16
years years
1) Dividing the hotels into groups of 25% each was done by calculating medians and quartiles, i.e. the boundaries of the individual categories were
set up in such a way that the hotel businesses could be divided equally into quarters
Source: Österreichische Hotel- und Tourismusbank 29
23. In many cases, the required equity ratio of over 8% is also not met
Selected operating KPIs of 5-/4-star accommodations1), 2009
Equity ratio COMMENTS
Hotel operations • The situation here is also
analyzed [no.] quite dramatic:
>26 <-16%
25% 25% – Over 50% of the hotels
267 supported by the ÖHT
have an equity ratio of less
than
th 8%
– In many cases, the ratio is
25% 25% even negative
7-26% -16 to 7%
1) Dividing the hotels into groups of 25% each was done by calculating medians and quartiles, i.e. the boundaries of the individual categories were
set up in such a way that the hotel businesses could be divided equally into quarters
Source: Österreichische Hotel- und Tourismusbank 30
25. The supply-side situation will become even more critical
Correlation of capacity utilization to no. of new beds in 5-/4-star accommodations
Capacity utilization, 2008
[%] COMMENTS
75%
Salzburger Saalachtal
70%
• Over the next three years, hotels
Kleinwalsertal will add another 11,000 beds in
Achensee
65% Serfaus - Fiss - Ladis over 20 destinations
Kaiserwinkl
60% • In roughly half of the destinations
Pillerseetal
Innsbruck und seine Feriendörfer
55% Wien planning to expand capacity, the
Zell am See/Kaprun Thermenwelt Bgl. rate of capacity utilization is
50% Bodensee Vbg already less than 50%
Lammertal,
L t l
Stadt Dachstein Osttirol Wiener Alpen
45% Donau NÖ Salzburg
in NÖ
Montafon
40% Salzkammergut (OÖ, S, ST)
Nationalparkregion
35% Mostviertel
30%
Salzburger Seenland
25%
20%
0 50 100 150 200 250 300 350 400 450 500 550 600 1,800 4,000
No. of new beds by 2013 [no.]
Source: ÖHV; Roland Berger 33
26. In this case, supply and demand will continue to diverge
Expected dvlpmt. of supply and demand, 5-/4-star accommodations [2000 = Basis, %]
COMMENTS
129
130
Supply
126 • If the number of beds continues to
increase at its current rate,
125
121
123
! capacity utilization will become
p y
even worse over the next five
120 Demand years – Supply and demand will
116 120 diverge further
115 113 117
111 115 • In addition, the World Economic
109 Forum expects even shorter stays,
110 112 later bookings and a preference
106 109 for lower prices in Austria
104
105 107 107
100
100
101
100
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Assuming 365 days open a year
Source: Statistics Austria; WEF; Roland Berger 34
27. The increase in overnight stays by foreign visitors is primarily due
to tourists from Eastern European countries
No. of overnight stays in Austria by country of origin, 2009 [m]
Change 2005-2009 [%]
COMMENTS
-4% +9% +4% -9% -3% +6% +73% +4% +30% +16% +69% -20% +83% +265% +13%
• The number of
48.9
visitors from
Eastern European
p
countries,
especially Russia
and Romania, has
risen
9.5
8.1 • However, the
impressive three-
digit growth from
3.6 3.3 Romania and the
3.0 2.5 2.0
20 1.6 1.5 1.5 two-digit
two digit growth
1.4 1.1 1.0 0.8 from Russia repre-
sent a change
DEU NLD CHE GBR ITA BEL CZE FRA DNK HUN POL USA RUS ROU Other
from a low
absolute basis
Source: Statistics Austria, data for 2010 will be available in January 36
28. Foreign markets could boost capacity utilization in first-class
accommodations
Development of overnight stays by domestic/foreign visitors in Austria [m]
COMMENTS
• Since the start of 2000, but also in
92.8 the 2009 crisis, the domestic
87.7 87.2 88.4 89.8
85.8 86.3 85.9 market has remained constant
82.5
82 5 83.7
83 7
and stable
• During the crisis in 2009, the
foreign market dropped
precipitously
• There is still a need to catch up on
32.1 33.0 33.9 34.4 the foreign markets, since they
31.2 31.4 31.0 31.6 31.2 31.5
offer the necessary growth
potential and volumes
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Domestic
Foreign
Source: Statistics Austria 37
29. It is doubtful whether the Austrian National Tourist Office's current
budget is sufficient to reach more foreign visitors
Budgets of national tourism organizations per overnight stay, 2009 [EUR]
COMMENTS
1.50
• At first glance, Austria is
somewhere in the midfield in
terms of what national tourism
organizations spend on marketing
per overnight stay
• However, smaller countries such
as Switzerland and Austria
0.42 naturally have to spend more per
overnight stay in order to create a
0.30
presence on the international
0.11 0.10 tourism market
0.07
• For this reason, it makes sense to
compare Austria with Switzerland
– the latter's marketing budget per
Switzer- Austria France Italy Germany UK overnight stay is over three times
land higher than Austria's
hi h th A t i '
Source: ÖHV; Roland Berger 38
30. Austria's tourism organization has a medium number of offices –
compared to Switzerland it is even underrepresented
Offices of national tourism organizations, 2009 [no.]
COMMENTS
27
26
25
• As one would expect, large
21 countries such as France and the
19 UK have the most tourism offices
• But it is also clear that Germany
and Italy have significantly fewer
offices than Austria and
11 Switzerland
• Compared with Switzerland, a
similarly small country, Austria is
underrepresented by its 21 offices
worldwide
Austria Germany UK France Switzer- Italy
land
Source: ÖHV; Roland Berger 39
31. Increasing the Austrian Tourist Office's budget would relieve
hotels and make more targeted advertising possible
Development of advertising budgets1) [2000 = Basis; %]
Owner's contribu- COMMENTS
tion to adver-
tising [EUR m]
130% • The Austrian Tourist Office's
123% budget shrank in 2000 and
202.7
120% 116% 2001, and then remained
,
%
113% constant for eight years
111%
107% 108% 107%
110% 106%
103% • In contrast, hotels today spend
100%
100%
about 23% more on adver-
tising than they did in 2000
90% • Austria neglected to increase
83%
the Tourist Office's funds when
80% 76% 76% 76% 76% 76% 76% 76% 76% the economy was good,
32.1 despite increasing bed
p g
70% capacity
• The Economic Chamber
60% cancelled the contract with the
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Austrian TO for contributions
Spending on advertising and communication, in % of income of 5-/4-star accommodations (median) to th d ti i budget
t the advertising b d t
Austrian Tourist Office's budget
Note: No data available on the development of the tourism budgets of state tourism organizations 1) Not adjusted for inflation
Source: Österreichische Hotel- und Tourismusbank 40
32. Summary and recommendations
1 Austria continues to be a successful tourist destination and is recognized as such abroad
2 The hotel sector has developed toward offering high-quality products and services, in turn
leading to cutthroat competition in the top-quality segment
3 The resulting price decline affects the ability to guarantee the necessary quality and threatens
the economic viability of the domestic hotel industry in the medium term
4 The announced expansion programs will reinforce these tendencies and further depress
capacity utilization
5 Foreign markets in particular could generate enough capacity utilization for the increased
number of beds. However, compared to other countries, Austria's National Tourism Office is
underfunded, while hotels have significantly increased their own advertising budgets
More beds, therefore, do not necessarily result in more guests. For this reason,
decision makers must focus more on foreign markets, since that's where the
purchasing power is. This would go a long way toward utilizing existing and future
capacity while fi
it hil financially supporting the domestic hotel industry
i ll ti th d ti h t l i d t
41
