Austrian hotel investment market 2024 – trends, developments and insights

Vera Woschnagg, Managing Director of Austria Real GmbH, presented her current report on the Austrian hotel investment market on September 30, 2024 at the MHI GmbH Hotel Management Seminar in the Austria Trend Hotel Savoyen.

The hotel investment market in Austria has experienced a number of significant changes in 2024. High interest costs and changing investor behavior are leading to more cautious decision-making, which is reflected in current transaction volumes and property values.

Main developments at a glance:

1. Hotel performance
   The tourism sector in Austria showed a strong recovery in 2023, with overnight stay numbers quickly returning to pre-pandemic levels. Revenue per available room (RevPAR) in Vienna increased by 3.24% annually compared to 2019. Especially 1-2 star and 5 star hotels from this development.
2. Market growth and investment trends
   The data from purchase contracts in the land register and asset deals were analyzed. In the first half of 2024, transaction volume increased by 25% to 162.12 million Ꞓ compared to the same period in 2023. This increase suggests that recent price reductions have attracted investors, resulting in a higher number of property sales.
3. Regional developments
   The highest transactions in the first half of 2024 were recorded in Vienna (T19.8 million), Innsbruck (T17.75 million) and Vorarlberg (T20.16 million). (Data: ZT Data Forum eGen)
4. Market outlook
   A total of ten hotels with around 2,200 new rooms are planned to open in Vienna by the end of 2024. Around 3,000 additional hotel rooms are expected across Austria by 2025, including around 1,200 in Vienna. The market remains dynamic, with a particular focus on sustainable and flexible properties. Despite the high interest costs, interest in value-add investments and operator-free hotels remains high.
5. Investor trends
   Austrian investors were particularly active in 2023 and early 2024 and accounted for the majority of transactions. This represents an increase compared to the previous year. However, due to the high financing costs, interest in new construction projects is limited.

Ms. Vera Woschnagg, MBA, from Austria Real GmbH will be happy to provide you with detailed market analyzes and further information. The company is based in Vienna’s 1st district and specializes in hotel brokerage. Ms. Woschnagg, who earned an MBA in Hotel Marketing from Oxford Brookes University, has been brokering successful hotels in Austria and neighboring countries with her team for over 12 years.