Austria's hotel sector undergoing change during the vacation season

The Alps Resorts industry study, conducted in collaboration with P8 Business Strategy, has identified key challenges that the Austrian holiday hotel industry is currently facing. The study surveyed around 150 tourism decision-makers to shed light on the biggest hurdles the sector is encountering.

The study highlights three major areas of concern: changing guest booking behaviors, rising operational costs, and workforce shortages.

Guest booking behavior has seen a shift towards greater demand for flexible cancellations and shorter booking windows, with an increase in last-minute bookings. This trend creates operational uncertainty for hotels, necessitating the adoption of more agile pricing strategies and policies.

Rising costs, particularly labor costs, are a significant issue. Wage inflation, a limited talent pool, supply chain disruptions, volatile commodity prices, and increased energy taxes linked to decarbonization and energy transition efforts have pushed costs of goods and utilities higher.

Staffing challenges include difficulty hiring and retaining workers with appropriate skills, particularly for management roles, and high salary expectations combined with concerns about work-life balance and job stability. These staffing shortages are exacerbated by seasonality and a lack of training resources in smaller or independent hotels.

Suggested solutions from the study focus on improving operational agility and workforce management. Hotels need to adopt more flexible and dynamic pricing and cancellation policies to align with modern guest expectations and booking trends. To address labor shortages, the industry should invest in training programs and better employee retention strategies, possibly improving work-life balance and offering more stable seasonal employment. Mitigating rising costs may require innovation in energy efficiency and leveraging more cost-effective operational practices amid supply chain uncertainties.

While these challenges and solutions are broadly noted across European hotels, the Alps Resorts–P8 study specifically highlights such trends as critical for ensuring sustainability and competitiveness in Austria’s holiday hotel sector in 2025.

In an effort to address staff shortages, Alps Resorts has introduced a lean gastronomy concept called Alps Kitchen. Thomas Payr, CEO of Alps Resorts, explains that cooperation with a reputable operator could be a way out for many businesses.

The study also reveals that 80% of medium-sized Austrian holiday hotels (with up to 49 employees) are significantly affected by the skills shortage. Moreover, only 40% of Austrian holiday hotel businesses have the necessary means or confidence to achieve their growth objectives.

Sustainable solutions are needed for a sustainable future in the face of these challenges. The study identifies a skills shortage, investment backlog, and unresolved succession issues as the most pressing challenges facing the industry. To tackle these issues, efficient bundling of central company tasks creates synergies and facilitates lean operating concepts that can manage with fewer staff. A partnership with a successful operating company can significantly improve the negotiating position for classic credit financing in the Austrian holiday hotel industry.

Despite a sustained tourism boom and increasing visitor numbers, the Austrian holiday hotel industry is experiencing growing pressure. The study reveals a tense mood in the holiday tourism sector, with many businesses looking to the future with little optimism. More than half (56%) of surveyed businesses lack a concrete succession concept, with 48% potentially considering handing over to a professional operator. At least one in five Austrian holiday hotel businesses have not made significant investments in the past five years.

Thomas Payr, CMO of Alps Resorts, and Stefan Bracher, Director of Marketing & Corporate Strategy at Alps Resorts, presented the results of the industry study. Cooperation with a hotel chain like Alps Resorts can be a solution for hoteliers without a succession concept who want to keep their property in the family. Alternative financing models like buy-to-let or crowdfunding can create financial room for urgently needed investments in the Austrian holiday hotel industry.

[1] Alps Resorts Industry Study 2021, p. 11 [2] Alps Resorts Industry Study 2021, p. 15 [3] Alps Resorts Industry Study 2021, p. 21

Austria's hotel sector undergoing change during the vacation season