Europe -  Vienna, Austria

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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 last couple of years, the market has enjoyed constant growth, achieving an occupancy of just below 80% in 2019. Tourism statistics clearly reflect this increase in popularity, with average year-on-year growth of around 5% for accommodated bednights (18.6 million in 2019) since 2013. During this time, ADR growth has been more modest, although it had picked up momentum in the last two to three years. 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 China in recent years.

In 2020, performance for the market, as for the rest of Europe, showed a clear downward trend linked to the COVID-19 pandemic. The majority of hotels closed in March and some reopened in the late spring, operating with low occupancy levels during the summer months. Autumn and winter proved to be more challenging due to the reimposed virus and quarantine measures as well as the absence of business travel which tends to be the prevailing demand driver during this period. The market ended the year with a RevPAR decrease of around 75%, compared to 2019.

There are currently more than 6,000 rooms (17% of current supply) due to enter the Vienna market by the end of 2024, although it remains to be seen how many of the planned projects actually materialise following the downturn caused by the pandemic. The largest hotel in the pipeline by room count is part of the LeopoldQuartier project, a mixed-use development consisting of residential units and a hotel with around 700 rooms. The hotel is still in the planning stage and the opening date and brand are yet to be announced.

In 2020, Vienna’s transaction activity shrunk by 80% compared to the previous year, with only two hotels transacting. The 68-room The Ring Hotel and the 211-room LetoMotel Wien were sold as single asset deals.

Following the pandemic and the significant downturn in travelling across all of Europe, hotel values in Vienna decreased by 18% in 2020, as recorded in our 2021 European Hotel Valuation Index. Significant reliance on both individual and group business demand, together with notable new supply are most likely to lead to a slightly longer recovery period than more leisure-driven destinations.

Change In Value For Market: (€Euro)

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%

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković
[email protected]
  • +44 20 7878-7721 (w)
  • +44 7 593572865 (m)