Download - Do more beds bring in more guests
Do more beds bring in more guests?STUDY
Do more beds bring in more guests?
Austrian Hotel Association (ÖHV)
1Vienna, January 2011
The Austrian Hotel Association and Roland Berger have enjoyed a successful partnership since 2005
Joint studies by the ÖHV and Roland Berger
20092008 20112005 2007
Success factors and best practice in destination management
Austria looks to Central and Eastern Europe as a promising source
Do more beds bring in more guests?
ÖHV Destination study VII –Investment analysis
Feasibility analysis for an "Austrian tourism strategy –ÖTS" managementa promising source
of tourism and hotel business
analysis ÖTS
2
Contents Page
A. Background – Austria has a successful tourism industry. Yet hotel room prices are b l th f tit i th t i 5below those of competitors in other countries 5
B. Challenge – The sector has developed into one offering top quality, which is currently leading to cutthroat competition 18currently leading to cutthroat competition 18
C. Outlook and summary – Announced expansion programs are reinforcing these tendencies. Tourism budgets must be revisited 32
This document was created for our client. The client is entitled to use it for its own internal purposes. It must not be passed on to third parties except with the explicit prior
4
p p p p p p pconsent of Roland Berger Strategy Consultants. This document is not complete unless supported by the underlying detailed analyses and oral presentation.
© 2011 Roland Berger Strategy Consultants GmbH
A. Backgroundg
5
2010 was another successful year for tourism in Austria – The country continues to be one of the top destinations worldwide
COMMENTS
Top 15 tourism destinations in the world – International arrivals
Rank 2006 2007 2008 2009 20101)World mkt. share2) [%] COMMENTS
• Compared to other countries, Austria continues to be one of the most popular vacation
Rank 2006 2007 2008 2009 2010 share [%]
FRAESPUSA
FRAESPUSA
FRAUSAESP
FRAUSAESP
FRAUSACHN
8.16.56 0
123 p p
destinations in the world. It attained its highest ranking (7th place) in 2003
• Even as other, larger countries
USACHNITAGBR
USACHNITAGBR
ESPCHNITAGBR
ESPCHNITAGBR
CHNESPITAGBR
6.05.64.72.9
3456
Even as other, larger countries have surpassed Austria, the country has retained its share of the world tourism market – about 2.3% – for five years, making it 11th worldwide
DEUMEXAUTRUS
DEUUKRTURMEX
DEUUKRTURMEX
TURGERMYS3)
MEX
GERTURMYS3)
MEX
2.92.92.62.3
789
10 11th worldwideUKRTURCANMYS3)
MYS3)
AUTRUSCAN
MYS3)
AUTRUSCAN
AUTUKRRUSHKG
AUTUKRHKGRUS
2.32.22.22 1
11121314
6
MYS3)
GRCCANHKG
CANHKG
HKGCAN
RUSCAN
2.11.7
1415
Source: UNWTO; Roland Berger
1) Forecast 2) Current value 3) Malaysia
For years, the tourism sector has constantly contributed over 15% to GDP, generating over EUR 40 bn with approx. 180,000 employees
COMMENTS
Value added by the tourism and leisure industry in Austria [EUR bn]
No. of COMMENTS
• The tourism sector has generated over EUR 40 bn for several years, making it one of Austria's most
No. of employees3)
['000]168 169 180
Share ofGDP [%]
179 1822)
15.3 15.0 14.9 15.2 15.11)
42.841.842.240.739.2
gimportant industries
• In terms of FTEs, the tourism industry employs more than 180,000 people. Due to the
GDP [%]
180,000 people. Due to the seasonal nature of tourism work, this number is at times much higher
20101)2009200820072006
7
2010 )2009200820072006
Source: Statistics Austria; WKO; AMS
1) Forecast2) As at September 20103) Average employment over 365 days; yoy comparisons no longer possible starting in 2008 because of ÖNACE reorganization
It's also encouraging that per capita spending by the most important foreign visitors has increased faster than inflation
COMMENTS
Development of daily per capita spending of visitors from Germany1) [EUR]
3.2 COMMENTS
• Austria continues to attract visitors with purchasing power
• German tourists who make up
Inflation rate [%] Avg. 1.9
0.5
2.21.5
• German tourists, who make up about half of all overnight stays in Austria by foreign visitors, spent EUR 120 per person per day in the 2008/2009 season 120120
106106
CAGR +4.2%
• The rise in visitor spending considerably exceeds the average Austrian inflation rate
• This phenomenon is connected to
106106
pshorter stays (2000: 5.2 days, 2009: 4.6 days) – to experience more in this shorter amount of time, German visitors spend more money
8
money
Source: T-MONA guest survey with full-year data for 2006/2007 and 2008/2009; Statistics Austria
1) Survey was conducted over the 2006/2007 and 2008/2009 winter holidays
2009200820072006
The euphoria is also reflected in the number of hotel beds – 16,000 beds are to be added over the next five years
COMMENTS
Development of the no. of beds in hotels and similar accommodations1) – Austria ['000]
COMMENTS
• After bottoming out in 2003, the supply of beds in hotels and similar accommodations reached
650 CAGR +0.5%
2000-levels again in 2009
• Starting in 2009, the number of beds is expected to increase by 0.5% each year. In the coming five
606603600596593590588580
574573571571566569
587588600
CAGR 0%
0.5% each year. In the coming five years, another 16,000 hotel beds are to be added
• The forecast is based on announced and ongoing
571571566569
550
announced and ongoing expansion plans plus regression analyses for 2000-2009
150
1410 1309 1208 110200 01 0703 0504 06Forecast
10Source: Statistics Austria; ÖHV; press research, Roland Berger
1) Similar accommodations = pensiones, inns
Forecast
The success of Austrian tourism is recognized abroad – The WEF named Austria the world's 2nd most attractive tourist destination
COMMENTS
Travel & Tourism Competitiveness Index, 2007-2009
Rank2) COMMENTS
• The quality of Austrian tourism is well-known abroad
CountryNo. of points1)
2009 2009
Switzerland 5.68 1
Rank )
2008 2007
1 1• Since the Travel & Tourism
Competitiveness Index was launched in 2007, the World Economic Forum has consistently named Austria as the world's
AustriaGermanyFranceC d 32
5.46
5.345.41
2345
23
109
23
127 named Austria as the world s
second most attractive country
• But the competition is stiff: direct competitors such as Switzerland, Germany and Italy have held their
CanadaSpainSwedenUSA
5.295.32
5.285 24
5678
9587
71517
5 Germany and Italy have held their positions unchallenged for years
USAAustraliaUK…
5.245.24
5.22
89
10…
74
16…
51310…
11Source: World Economic Forum's Travel & Tourism Competitiveness Report
Italy 4.78 28
1) On a scale of 1 to 7 (7 = best, 1 = worst) 2) 133 countries analyzed
28 33
Austria receives top marks for its tourism infrastructure, but earned its worst rating in price competitiveness
COMMENTS
Travel & tourism subindices – Austria, 2009
Rank1) Indicator No. of points
• Taking a closer look at the various indices, two in particular stand out:
In the "Tourism infrastructure"
Tourism infrastructure Health and hygieneSafety 6.5
6.97.01
56 – In the Tourism infrastructure
subindex, Austria is number one in the world
– Austria's worst showing was in th "P i titi "
yEnvironmental sustainabilityLand transportation infrastructure Cultural resourcesPrioritizing of travel and tourism
5.66.0
5 65.8
9101114 the "Price competitiveness"
subindexPrioritizing of travel and tourismEducation and trainingHuman capital Affinity for travel and tourism
5.6
5.75.4
5.814161823
Information + telecomm. tech. infrastructureAir travel infrastructure Laws and regulationsNatural treasures
4.54.8
5.14.1
23262840
12
Natural treasuresPrice competitiveness
4.13.8
40118
1) Out of 133 countries
Source: World Economic Forum's Travel & Tourism Competitiveness Report
Regarding hotel coverage, Austria is in third place with 3.5 rooms per 100 inhabitants – Behind Cyprus and Malta
COMMENTSTour-
Hotel coverage: No. of hotel rooms per 100 inhabitants, 2009
COMMENTS
• In terms of hotel coverage, Austria is in third place; only Cyprus
5 6
Tourism sector's share of GDP [%]
21.4 23.0 17.2 13.3 40.7 17.2 9.7 12.0 12.6 8.6 10.9 9.215.4
p ; y ypand Malta, which have hardly any other economic sectors, offer more rooms
3 5
4.95.6
• To compare: Italy is in 8th place with 1.8 rooms per 100 inhabitants, Switzerland is 10th with 1 7 rooms1 1
1.71.81.81.92.3
2.83.33.5
1.7 rooms1.01.01.1
14Source: World Economic Forum's Travel & Tourism Competitiveness Report
DEUCHEBGRITAESPBRBISLGRCAUTMLTCYP FRA GBR
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
149 7
203.4200.2
167.4164.7154.8149 4
Difference:-26%
COMMENTS
• Austria's 69th place in the hotel price index puts it in the middle of the international comparison149.7149.4
131.8
104.8
p
• Switzerland achieves an average price of USD 200.20 for a double room in a first-class hotel, Italy USD 203.40 –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
AustriaSlovenia Hungary Croatia Czech Slovakia Switzer- Italy
Switzerland and Italy were rated worse than Austria in terms of their tourism infrastructure (7th and 3rd place, respectively) Germany
16Source: World Economic Forum's Travel & Tourism Competitiveness Report
Rep. land
1) Avg. gross price per double room in first-class, branded hotels
B. Challengeg
18
Over the past ten years, the number of beds in Austria's top quality accommodations has risen sharply
COMMENTS
Development in the no. of hotel beds ['000]
COMMENTS
• Quality lodgings (5- and 4-star accommodations) in particular have seen massive growth in the
269264252
247242231232232240
260
2805-/4-star
gnumber of beds – over 30% in the last ten years. Further growth of 9% is forecast for 2010-2013
• The number of beds in
231221218
209204191189184
220219218217216216215215
218220220224232232
200
220
240
3-star
The number of beds in 3-star accommodations has decreased slightly (by 7%), while the supply in 2- and 1-star lodgings has gone down by 25%
204197184
138140144146149154
167172160
180
• The forecast for 2010-2013 is based on announced and existing expansion plans111113
123126130133138140
100
120
140
2-/1-star
19Source: Statistics Austria; ÖHV; Roland Berger
100'101)'09'08'07'06'05'04'03'02'01'00 '111) '121) '131)
1) Forecast
For years, the number of overnight stays increased faster than the number of beds – Now both values are converging again
COMMENTS
Supply and demand in 5- and 4-star accommodations [Basis = 2000, %]
COMMENTS
• Over the past few years, the number of overnight stays in 5-and 4-star accommodations
140
130outstripped the number of beds available by up to ten percentage points ("demand-supported growth")
120
• But in the last two years, the curves have once again converged ("stagnation")
110
100
Demand-supported growth
Stagnation
020102009200820072006200520042003200220012000
21Source: Statistics Austria
Demand: number of overnight staysSupply: number of available beds
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, %]
COMMENTS
• Despite the massive increase in the number
Urban accommodations
150
Vacation accommodations
150
of beds, vacation accommodations have developed more strongly over the past decade
140
130
140
130
decade
• In the cities, the picture is somewhat different: whereas the supply of beds increased slowly
120
110
120
110
beds increased slowly but surely, demand collapsed in 2008/2009
100
0'09'08'07'06'05'04'03'02'01'00
100
0'09'08'07'06'05'04'03'02'01'00
22Source: Statistics Austria; tourmis
1) Defined as accommodations in the state capitalsDemand: no. of overnight staysSupply: no. of available beds
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
COMMENTSWaldviertel
Weinviertel
Donau NÖ
Donau NÖMühlviertel
Donau OÖ
Linz
• 80% of all Austrian destinations increased their supply of beds
• In roughly 20% of all Austrian destinations, the number of beds has stagnated or declined
Wienerwald
Wien Donau NÖ
Neusiedler SeeMostviertel
Inn- and Hausruckviertler
Thermenland
NationalparkRegion
Vienna Alpen in NÖSalzkammergut
Salzburger Seenland
city Salzburg and environment
number of beds has stagnated or declined
Hochsteiermark
Thermenwelt BurgenlandOststeiermark
Urlaubsregion Murtal
SchladmingDachstein
Schladming-Dachstein
Tennen-gau
Lammertal, DachsteinTennen-
gebirgeRamsau
Salzburger Sportwelt
Ober-tauernGroß-
l
Sonnen-terasse
Ferienregion
Hochkönig's Bergreich
Saalfelden/Leogang
Salzburger Saalachtal
Piller-seetal
Zell am See – Kaprun
Saalbach Hinterglemm
Ferienregion Nationalpark Hohe Tauern
Kitzbüheler Alpen
Kaiser-winkl
Wilder Kaiser
Ferienregion Hohe Salve
Wild-schönau
FerienlandKufstein
Alpbachtal and Tiroler
Seenland
Achensee
Zillertal
Silberregion Karwendel
RegionHall
Innsbruck + seine
SeefeldMieminger Plateau
Tiroler Zugspitz Arena
Ferienregion Reutte
Tannheimertal
Imst-Gurgltal
Lechtal
TirolWest
Alpenregion Bludenz
BodenseeVorarlberg
Bregenzer-wald
Klein-walsertal
Schladming-pipemoos
Tirol Mitte
Graz and Region Graz
Steirisches Thermenland
Süd- and West Styria
Lavanttal
Villach-
g
Nockberge, Bad Kleinkirchheim
Millstätter-see
Ferienregion Lungau
Katschberg
arl-tal
Oberes Drautal
OsttirolNationalpark Region Hohe
Tauern Carinthia
Gasteiner-tal
Ferienregion Nationalpark Hohe Tauern
Hohe TauernZillertal
WipptalStubaital
HallFeriendörfer
West
Serfaus, Fiss, Ladis
Tiroler Oberland
Pitz-tal
Ötztal
Paznaun
Arlberg
Montafon
Lieser-Maltatal
23Source: Statistics Austria; ÖHV; Roland Berger
>25%Increase in beds 0-25% <0%
Klopeiner See –SüdkärntenCarnica-Region
Rosental
Wörthersee
VillachWarmbad,
Faaker See, Ossiacher
See
Carinthias Naturarena
Klagenfurt
No comparison data available
As one would expect, the increase in the supply of beds meant that the occupancy rate continuously declined
COMMENTS
Supply of beds vs. occupancy in 5-/4-star accommodations [Basis = 2000, %]
COMMENTS
• Over the past decade, the supply of beds rose more than
25055%
Avg.Beds ['000]
30% and is about to pass 250,000
• At the same time, the occupancy rate in
150
200
50%
occupancy rate in quality accommo-dations is declining steadily
50
10045%
040%2009200820072006200520042003200220012000
24Source: Statistics Austria
BedsOccupancy
Over a third of Austrian tourist destinations achieved less than 45% capacity utilization in the prosperous year of 2008
COMMENTS
Annual capacity utilization in 5-/4-star accommodations by destination, 2008 [%]
Waldviertel
Weinviertel
Wi Donau NÖ
Donau NÖMühlviertel
Donau OÖ
I dLinz
• Even in a prosperous year like 2008, over a third of Austria's tourism destinations reached an annual capacity utilization of just 45% maximumCapacit tili ation is not calc lated based on
Wienerwald
Wien Donau NÖ
Neusiedler SeeMostviertel
Inn- and Hausruckviertler
Thermenland
NationalparkRegion
Vienna Alpen in NÖSalzkammergut
Salzburger Seenland
city Salzburg and environment
• Capacity utilization is not calculated based on days open but rather on full-year capacity
Hochsteiermark
Thermenwelt BurgenlandOststeiermark
Urlaubsregion Murtal
SchladmingDachstein
Schladming-Dachstein
Tennen-gau
Lammertal, DachsteinTennen-
gebirge Ramsau
Salzburger Sportwelt
Ober-tauernGroß-
arl-
Sonnen-terasse
Ferienregion
Piller-seetal
Ferienregion Nationalpark Hohe Tauern
Kaiser-winkl
Wilder Kaiser
Ferienregion Hohe Salve
Wild-schönau
Alpbachtal and Tiroler
Seenland
Achensee
ZillertalRegion
Hall
Mieminger Plateau
Tiroler Zugspitz Arena
Ferienregion Reutte
Imst-Gurgltal
TirolWest
Klein-walser-
tal
Tirolmitte Schladming-pipemoos
BodenseeVorarlberg
Bregenzer-wald
Alpenregion Bludenz
Tannheimertal
Lechtal
Silberregion Karwendel
Seefeld
Innsbruck + seine
FerienlandKufstein
Saalbach Hinterglemm
Kitzbüheler Alpen Hochkönig's
Bergreich
Saalfelden/Leogang
Salzburger Saalachtal
Zell am See – Kaprun
Graz and Region Graz
Steirisches Thermenland
Süd- and West Styria
Lavanttal
Villach-
Nockberge, Bad Kleinkirchheim
Milstätter-see
Ferienregion Lungau
Katschberg
arl-tal
Oberes Drautal
Gasteiner-tal
Ferienregion Nationalpark Hohe Tauern
Hohe TauernZillertal
WipptalStubaital
Hall
Serfaus, Fiss, Ladis
Tiroler Oberland
Ötztal
Arlberg
Montafon
Lieser-Maltatal
PaznaunPitz-tal
Feriendörfer
C i hi
Osttirol
Nationalpark Region Hohe
Tauern Carinthia
25Source: Statistics Austria; ÖHV; Roland Berger
Klopeiner See –SüdkärntenCarnica-Region
Rosental
WörtherseeWarmbad,
Faaker See, Ossiacher
See
KlagenfurtCarinthias Naturarena
>55%Capacity utilization 55-45% <45%
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
• The travel and booking platforms make it possible to compare offers
Vienna: 4-star hotels -2%
Vienna: 5-star hotels 5%
Innsbruck: 5 star hotels 7% make it possible to compare offers and create price transparency
• Compared to 2009, the prices in 2010 have often not reached the previous year's level Especially 4-S l b 5 t h t l 9%
Linz: 4-star hotels -10%
Innsbruck: 4-star hotels 0%
Innsbruck: 5-star hotels 7%
previous year s level. Especially 4-star accommodations were hit by cutthroat competition
G 4 t h t l 3%
Graz: 5-star hotels -9%
Salzburg: 4-star hotels 2%
Salzburg: 5-star hotels 9%
Klagenfurt: 5-star hotels -3%
Graz: 4-star hotels -3%
B 4 t h t l 2%
Klagenfurt: 4-star hotels -6%
26Source: Trivago; Roland Berger
Bregenz: 4-star hotels -2%
1) Average values from January to November, as far as data was available
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%
28Source: Österreichische Hotel- und Tourismusbank
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
COMMENTSDebt repayment period COMMENTS
• More than half of the hotels supported by the ÖHT do not
t th URG it i f>25years
0-8years
Debt repayment period
Hotel operations analyzed [no.]
meet the URG criterion for debt repayment period
• A quarter of hotel operations h t i d
25% 25%
years years
267
have repayment periods longer than 25 years
25% 25%16-25years
8-16years
29Source: Österreichische Hotel- und Tourismusbank
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
In many cases, the required equity ratio of over 8% is also not met
Selected operating KPIs of 5-/4-star accommodations1), 2009
COMMENTSEquity ratio COMMENTS
• The situation here is also quite dramatic:
>26 <-16%
Equity ratio
Hotel operations analyzed [no.]
– Over 50% of the hotels supported by the ÖHT have an equity ratio of less th 8%
25% 25%
>26 <-16%
267
than 8%
– In many cases, the ratio is even negative25% 25%
7-26% -16 to 7%
30Source: Österreichische Hotel- und Tourismusbank
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
C. Outlook and summaryy
32
The supply-side situation will become even more critical
Capacity utilization, 2008[%] COMMENTS
Correlation of capacity utilization to no. of new beds in 5-/4-star accommodations
65%
70%
75%Salzburger Saalachtal
Kleinwalsertal
[%]
Serfaus - Fiss - LadisAchensee
COMMENTS
• Over the next three years, hotels will add another 11,000 beds in over 20 destinations
50%
55%
60%Pillerseetal
L t l
Zell am See/KaprunWien
Thermenwelt Bgl.
Kaiserwinkl
Innsbruck und seine Feriendörfer
Bodensee Vbg
• In roughly half of the destinations planning to expand capacity, the rate of capacity utilization is already less than 50%
35%
40%
45% Osttirol
Nationalparkregion
Montafon
Lammertal, Dachstein
Mostviertel
Wiener Alpenin NÖ
StadtSalzburg
Salzkammergut (OÖ, S, ST)
Donau NÖ
Bodensee Vbg already less than 50%
20%
25%
30%Salzburger Seenland
33
50 600550500450 4,000400350300250200 1,8001501000
Source: ÖHV; Roland Berger
No. of new beds by 2013 [no.]
In this case, supply and demand will continue to diverge
COMMENTS
Expected dvlpmt. of supply and demand, 5-/4-star accommodations [2000 = Basis, %]
COMMENTS
• If the number of beds continues to increase at its current rate, capacity utilization will become
129
126
123121
Supply
125
130
! p yeven worse over the next five years – Supply and demand will diverge further
• In addition, the World Economic
120
117115
121
113111
Demand
115
120116
In addition, the World Economic Forum expects even shorter stays, later bookings and a preference for lower prices in Austria
115
112
109107107
109111
110
105106104
100 101
100
0
100
34Source: Statistics Austria; WEF; Roland Berger
20072006 2011201020092008 2015201420132012
Assuming 365 days open a year
The increase in overnight stays by foreign visitors is primarily due to tourists from Eastern European countries
COMMENTS
No. of overnight stays in Austria by country of origin, 2009 [m]
Change 2005-2009 [%] COMMENTS
• The number of visitors from Eastern European
-4% +9% +4% -9% -3% +6% +73% +4% +30% +16% +69% -20% +83% +265% +13%
48.9 pcountries, especially Russia and Romania, has risen9.5
• However, the impressive three-digit growth from Romania and the two digit growth
8.1
2 02.53.03.33.6two-digit growth from Russia repre-sent a change from a low absolute basis
0.81.01.11.41.51.51.62.0
DEU NLD CHE GBR ITA BEL CZE FRA DNK HUN POL USA RUS ROU Other
36Source: Statistics Austria, data for 2010 will be available in January
Foreign markets could boost capacity utilization in first-class accommodations
Development of overnight stays by domestic/foreign visitors in Austria [m]
COMMENTSCOMMENTS
• Since the start of 2000, but also in the 2009 crisis, the domestic market has remained constant 88.4 89.892.8
87.287.785.986.385.883 782 5and stable
• During the crisis in 2009, the foreign market dropped precipitously
83.782.5
precipitously
• There is still a need to catch up on the foreign markets, since they offer the necessary growth potential and volumes
33.0 34.433.932.131.531.231.631.031.431.2
potential and volumes
2009200820072006200520042003200220012000
37Source: Statistics Austria
2009200820072006200520042003200220012000
ForeignDomestic
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]
COMMENTSCOMMENTS
• At first glance, Austria is somewhere in the midfield in terms of what national tourism
1.50
organizations spend on marketing per overnight stay
• However, smaller countries such as Switzerland and Austriaas Switzerland and Austria naturally have to spend more per overnight stay in order to create a presence on the international tourism market0.070.100.11
0.300.42
• For this reason, it makes sense to compare Austria with Switzerland – the latter's marketing budget per overnight stay is over three times hi h th A t i '
Austria UKSwitzer-land
Italy Germany
0.07
France
38
higher than Austria'sland
Source: ÖHV; Roland Berger
Austria's tourism organization has a medium number of offices –compared to Switzerland it is even underrepresented
Offices of national tourism organizations, 2009 [no.]
COMMENTSCOMMENTS
• As one would expect, large countries such as France and the UK have the most tourism offices 19
252726
21
• But it is also clear that Germany and Italy have significantly fewer offices than Austria and Switzerland
19
11 Switzerland
• Compared with Switzerland, a similarly small country, Austria is underrepresented by its 21 offices worldwideworldwide
Austria ItalySwitzer-land
Germany UK France
39
land
Source: ÖHV; Roland Berger
Increasing the Austrian Tourist Office's budget would relieve hotels and make more targeted advertising possible
Development of advertising budgets1) [2000 = Basis; %]
COMMENTSOwner's contribu-
120%
130% 123%
%116%
COMMENTS
• The Austrian Tourist Office's budget shrank in 2000 and 2001, and then remained
tion to adver-tising [EUR m]
202.7
100%
110%
120%
106%100%
103%
111%107%
113%108% 107%
,constant for eight years
• In contrast, hotels today spend about 23% more on adver-tising than they did in 2000
80%
90%
76% 76% 76%76% 76%76%
83%
76% 76%
tising than they did in 2000 • Austria neglected to increase
the Tourist Office's funds when the economy was good, despite increasing bed 32.1
60%
70%
2009200820072006200520042003200220012000
p gcapacity
• The Economic Chamber cancelled the contract with the Austrian TO for contributions t th d ti i b d t
40
to the advertising budgetAustrian Tourist Office's budgetSpending on advertising and communication, in % of income of 5-/4-star accommodations (median)
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
Summary and recommendations
Austria continues to be a successful tourist destination and is recognized as such abroad1
The hotel sector has developed toward offering high-quality products and services, in turn leading to cutthroat competition in the top-quality segment
The resulting price decline affects the ability to guarantee the necessary quality and threatens
2
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
The announced expansion programs will reinforce these tendencies and further depress capacity utilization
3
4
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
5
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
it hil fi i ll ti th d ti h t l i d t
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capacity while financially supporting the domestic hotel industry