Europe -  Vienna

Vienna’s proximity to its neighbours in Central and Eastern Europe makes it a desirable starting place for companies establishing themselves in these markets. The city has a strong service sector, and several European and international banks have divisions in Vienna that support operations in Eastern Europe. Vienna enjoys a solid business infrastructure and is home to more than 200 of Europe’s largest companies and the headquarters of important international organisations, such as the UN, UNIDO, the IAEA and OPEC. Additionally, Vienna is one of Europe’s premier congress destinations, owing to the proximity of business generators and its historic heritage.

The hotel market in Vienna suffered substantially from the recession in 2008/09 as RevPAR decreased by around 20% in 2009. Occupancy levels recovered in the following year, and remained stable in the low 70s thereafter up until 2014; in the last four years, the market has enjoyed constant growth and occupancy is currently just below the 80s. Tourism statistics go hand-in-hand with the rising occupancy trends as there has been an average year-on-year growth of 5% of accommodated bednights (17.4 million in 2018) since 2013. On the other hand, market data reveals that operators have had difficulty in increasing average rates since the drop experienced in 2009 in an effort to maintain occupancy; average rate grew at a compound annual rate of 1.5% between 2013 and 2018, and currently stands far below the 2008 rates.

2018 was a good year for Vienna, as it benefited from the organisation of the EU Presidency. As a result, both overall arrivals and bednights registered a 6% increase in 2018. The main source market in terms of overnights to Vienna remains Germany, followed by domestic travellers. Additionally, Vienna has seen increased visitation growth of travellers from the USA, UK and Middle Eastern markets in arrivals and overnight stays in recent years.

There are currently more than 5,000 rooms due to enter the Vienna market by the end of 2023, including a range of student accommodation, independent properties, and four- and five-star branded hotels. The largest project by room count is The Student Hotel Wien with 822 rooms expected to make its debut by early 2020; another large property still in the planning process and expected to enter the market by the end of 2023 is the InterContinental with 480 rooms.

Recorded hotel transactions in central Vienna have been estimated at €240 million within the last two years. Compared to 2016, far more single asset transactions have occurred in proportion to total transactions. The largest sale within the last two years by price was the 270-room DesignHotel Roomz, which exchanged for approximately €83 million (€307,000 per room).

Hotel values in Vienna increased by 5.8% in 2018, as recorded in our 2019 European Hotel Valuation Index.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Vienna RevPAR Change (€Euro)

Vienna RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Magali Castells
[email protected]
  • +44 20 7878-7710 (w)
  • +44 7 850205149 (m)