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19. 01. 12. - 18:00

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19. 01. 12. - 18:00

Tourism subsidies set to shrink

The Austrian tourism industry may soon have to cope with a decline of financial support by the state.

People’s Party (ÖVP) Economy Minister Reinhold Mitterlehner said yesterday (Weds) that the overall volume of public subsidies to state-owned institutions and private enterprises "could probably be reduced by between 10 and 15 per cent". The minister – whose party cooperates with the Social Democrats (SPÖ) of Chancellor Werner Faymann – said a reduction of such extent should not negatively affect economic growth in Austria.

Studies show that public and private companies, various projects and organisations get more than 15 billion Euros from the state a year. The joint SPÖ-ÖVP administration plans to restructure its subsidisation programme to stop the state debt from soaring further. The Social Democrats and Vice Chancellor Michael Spindelegger’s ÖVP are trying to find out where cuts could be made without harming the fragile growth of the domestic economy. The parties’ leaders agree that the widespread system of double subsidies – money coming from the state and the provinces – must be reformed as soon as possible.

Mitterlehner confirmed yesterday that getting rid of mechanisms which help firms to numerous financial contributions for the same cause was a key target of the coalition. The economy minister spoke of a "potential for optimisations" of around 800 million Euros – and refused to rule out that the domestic tourism sector will be spared from the approaching austerity measures.

Mitterlehner said he was optimistic about the current winter holiday season. The 2011/2012 skiing period suffered a slow start as vast parts of the country had to postpone their official start of operations due to a lack of snow. The past few weeks featured intense snowfall before significant amounts of rain dominated the first days of this week. Mitterlehner announced yesterday he was convinced of the competitiveness of Austria’s hotels and restaurants after last year’s "slight upswing".

The economy minister also warned that many hotels and guesthouses could suffer turnover decreases despite steady overnight stay figures. Various experts had expressed such concerns before. Hotels of all categories try to keep bookings up by presenting a varied range of cut-price offers such as special deals for families and romantic weekend packages for couples.

The Austrian Hotels and Tourism Bank (ÖHT) said last week the decreasing volume of credits it provided hotels with was indicating that the businesses were planning to reduce their investments in 2012. ÖHT officials said tourism industry enterprises all over Austria received loans worth 880 million Euros in 2011 to finance around 1,800 renovations, expansions and restorations.

Almost 43 million overnight stays were registered by the Austrian tourism industry from November 2010 to February 2011, Statistik Austria said. The agency explained that this was a decrease of 2.1 per cent compared to the previous winter.

The Austrian Association for Costumer Information, VKI, recently appealed to holidaymakers to compare lift pass prices. The organisation said small skiing areas were charging less than 300 Euros for weekly passes for a whole family this winter while renowned regions were asking tourists to pay more than 700 Euros for the same types of tickets.

Austrian Times

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