This is how the Austrian hotel investment market developed in 2024.

The Austrian hotel investment market in 2024 has undergone significant changes, influenced by high interest rates and shifting investor behavior. Cautious decision-making has become more prevalent, as reflected in current transaction volumes and property values. Vera Woschnagg, CEO of Austria Real GmbH, presented her latest report on the Austrian hotel investment market at the Hotel Asset Management seminar, organized by IMH (Institut Manfred Hämmerle) at the Austria Trend Hotel Savoyen. In her report, she identified five major trends shaping the market: Hotel Performance The tourism sector in Austria saw a robust recovery in 2023, with overnight stays nearing pre-pandemic levels. Revenue per available room (RevPAR) in Vienna increased by 3.24% annually compared to 2019. Particularly, 1- to 2-star and 5-star hotels saw the greatest benefits from this rebound. Market Growth and Investment Trends Analysis of sales contracts and asset deals revealed a 25% increase in transaction volume during the first half of 2024, reaching €162.12 million compared to the same period in 2023. This growth suggests that recent price reductions attracted more investors, leading to an increase in property sales. Regional Developments The largest transactions in the first half of 2024 occurred in Vienna (€19.8 million), Innsbruck (€17.75 million), and Vorarlberg (€20.16 million), according to ZT Datenforum eGen. Market Outlook By the end of 2024, Vienna is expected to see the opening of ten new hotels, adding around 2,200 rooms. Nationwide, approximately 3,000 additional hotel rooms are projected by 2025, with 1,200 of them in Vienna. The market remains dynamic, focusing increasingly on sustainable and flexible properties. Despite the high cost of borrowing, interest in value-add investments and operator-free hotels remains strong. Investor Trends Austrian investors were particularly active in 2023 and early 2024, making up the majority of transactions. This represents an increase compared to the previous year. However, due to high financing costs, there is limited interest in new construction projects.