Europe -  Vienna

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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.

In the couple of years pre-pandemic, the market enjoyed constant growth, achieving an occupancy of just below 80.0% in 2019. Tourism statistics clearly reflect this increase in popularity, with average year-on-year growth of around 5.0% for accommodated bednights since 2013 (18.6 million in 2019). During this time, ADR growth has been more modest, although it had picked up momentum up to the pandemic. The main source market in terms of arrivals to Vienna remains the domestic market, followed by Germany. Additionally, Vienna has seen increased visitation from the USA, UK and more recently China . In 2020, the performance was impacted by the pandemic. The majority of hotels closed in March and some reopened during the summer months. The end of the year brought further adversities due to the reimposed quarantine measures resulting in a RevPAR decrease of around 75.0%, compared to 2019. Similar dynamics continued in 2021 with single-digit occupancies in the first half of the year. The market experienced a pick-up in volume from June onwards, until the arrival of the Omicron variant, which impacted the end of the year .

There are currently around 4,400 rooms (11.0% of current supply) due to enter the Vienna market in the next couple of years. The majority of the pipeline consists of midscale and upscale properties, around 40.0% and 35.0%, respectively.  Some of the most notable hotels in the pipeline are the 158-room Hotel Indigo Vienna (May 2022), the 99-room Rosewood Vienna (July 2022) and the 196-room The Hoxton Vienna (April 2023).

In 2021, Vienna’s transaction activity increased over from 2020, with the most notable transactions being the 305-room Hotel Renaissance sold in June 2021 for €31.4 million, and (coincidentally) the 369-room Imperial Riding School Renaissance Vienna Hotel sold in December 2021, which transacted for approximately €51 million or €140,000 per key.

Hotel values in Vienna increased by 3.6% in 2021, driven by operating efficiencies and RevPAR recovery, as recorded in our 2022 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: More than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
Senior Director
[email protected]
  • +44 20 7878 7722 (w)
  • +44 0 7725781037 (m)
Nikola Miljković
Associate
[email protected]
  • +44 0 2078787724 (w)
  • +44 0 7593572865 (m)