How are Covid-19 restrictions impacting businesses in Austria?

Man walks past shops
Here's a look at how businesses in Austria have been affected by almost two years of Covid-19. Photo: Joe Klamar/AFP
There has been a lot of discussion about the impact of Covid-19 restrictions on individuals, but what about businesses? Here’s what you need to know.

After almost two years of the Covid-19 pandemic and four national lockdowns in Austria, the strain is starting to show in certain businesses, especially for those in the tourism and hospitality industries.

Hotel owners in Vienna and the east of Austria were particularly badly hit by the latest lockdown in November and tourism businesses in the west are already feeling nervous about the upcoming winter season. 

But there is some good news as economic experts predict strong growth for 2022 and into 2023. As long as the pandemic doesn’t derail recovery again.

How have businesses in Vienna been impacted by Covid-19 restrictions?

The Vienna Chamber of Commerce recently raised concerns about the city’s hotel industry with figures showing bookings are only at 16 to 20 percent of capacity, despite the lockdown ending.

Data from Wien Tourismus show Vienna recorded 464,864 overnight stays last month, whereas in November 2019 (pre-pandemic) there were 1,190,410 overnight stays in the city. From January to November this year, just one third of hotel rooms were occupied in Vienna.

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Dominic Schmid, chairman of the hotel industry in the Vienna Chamber of Commerce, said one in five hotels have not reopened since the start of the pandemic, with small family-run businesses mostly impacted.

On Monday, Schmid told ORF Radio that the situation in the capital’s hotel industry is “almost hopeless” amid concerns about the possibility of another lockdown in early 2022.

Like the hotel industry, bars and restaurants in Vienna were forced to stay closed for an extra week (until December 20th) after restrictions were eased in most other parts of the country. This led to some owners voicing concerns about missing the main pre-Christmas operating period, as reported by Vienna Online.

However, it has since been announced that Covid-19 restrictions will be eased nationally on New Year’s Eve, which means bars and restaurants can operate past the current curfew of 11pm.

READ MORE: Austria announces new rules for Christmas and New Year

Non-essential retail businesses in the city have also been impacted by restrictions but received a boost to trade at the weekend after being allowed to open on Sunday 19th December for the last days of pre-Christmas shopping.

Additionally, in a bid to further boost retail and hospitality businesses in the city after the lockdown, the City of Vienna has reintroduced “gastro vouchers”. 

This means anyone that went shopping at a non-essential store at the weekend (December 18th and 19th) is in with the chance to win up to €100 of vouchers to be used in bars and restaurants in Vienna.

What is the impact of restrictions on Austria’s GDP?

Austria’s Economic Research Institute (WIFO) has released figures that show GDP dropped by -5.25 percent as a result of the latest three week lockdown. This is compared to pre-crisis levels, but is actually a rise if you compare it to winter 2020 which was -6 percent.

WIFO statistics show tourism was one of the hardest hit industries, particularly in eastern Austria which usually sees an increase in visits starting from November, and 19 percent fewer passengers travelled through Vienna Airport.

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In the west of Austria, the impact of the latest lockdown on tourism is not clear as the winter season typically starts at Christmas time, but figures from earlier in the year (April to June) show overnight stays in Tyrol were down by -4.7 million when compared with 2019.

The retail industry was also impacted by the lockdown with a -5 percent change in GDP, but personal services were down by -19 percent.

However, the lockdown had little to no impact on the production of goods, the construction industry or company-related market services.

What are the economic predictions for Austria in 2022?

According to WIFO, there is hope on the horizon for businesses in 2022, especially for those currently suffering as a result of Covid-19 restrictions.

Stefan Ederer, author of the current WIFO forecast, said: “In 2022, those sectors that were affected by regulatory restrictions in 2021 will grow strongly, especially retail trade, accommodation and food services, and other consumer-related services.”

WIFO is expecting strong growth in Austria in 2022 across most industries, as well as a gradual ease to supply chain delays, although inflation might remain high.

And looking even further ahead, WIFO forecasts Austria’s economy to return to moderate growth in 2023.

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This forecast is based on the expected ease of Covid-19 restrictions in 2022 and an increase in vaccination figures due to the planned compulsory vaccination (Impfpflicht). WIFO did not take into consideration future outbreaks or new Covid-19 variants, like Omicron. 

Additionally, on Monday, the OECD presented its latest Economic Survey of Austria, which showed that Austria’s economic recovery was on par with the OECD average, but that the crisis had revealed weaknesses in the country’s social welfare systems. 

The report also forecast a drop to 4.5 percent unemployment by 2023, and suggested extra support for women in the workplace, for example by expanding childcare offerings.

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