Outlook Hotel Market Vienna 2012
Kohl & Partner is publishing their annual report on the hotel sector in Vienna. The report includes market analysis on current and future levels of supply in the hotel sector, levels of tourist demand and an evaluation of the prospects and challenges the hotel property market will be facing.
Vienna saw a new record number of overnight stays in 2011, totaling 11.4 million. Occupancy grew throughout the year (5% up on the previous year), thus attracting various Austrian and international hotel investors and brands to Vienna. Despite the growth in overnight stays, investors, operators and banks face challenging times ahead.
The Viennese hotel sector has seen major growth in supply (an increase of 4,300 beds in 2011). However, after allowing for inflation, there was hardly any growth in the average room rate (the 5.5% increase merely took the average price to 2009 levels). The average price of a hotel room in 2011 in net terms was EUR 95.06 (excluding VAT, breakfast and local taxes). Despite increasing demand, occupancy changed bit in comparison to the previous year because of increased supply.
The next few years will see a large number of hotel projects being completed, e.g. Vienna main railway station, luxury hotel projects in the city centre etc. There is no doubt that Vienna needs new hotel capacity for the longer term. In Mr Schaffer's view, "compared to the levels in many German cities, there is room for supply levels in the (low) budget segment to double". Mr Schaffer added that "there is no need for other 'more-of-the-same' hotel products as the only way for these to differentiate themselves from one another is on room price, and this is neither to the benefit of operators nor investors".
Commission due to the constantly increasing number of online reservations and the higher fees payable to credit card issuers are driving distribution costs up. Mr Schaffer continued, "as far as the customer is concerned, prices have remained stable; however, hoteliers are losing between 15% and 30% of their gross turnover."
Copies of the Kohl & Partner Vienna hotel real estate report for 2012 can be requested at [email protected]