National Tourism Funding
The Ministry of Labour and Economy is responsible for the strategic use of budget funds to support activities in the tourism and leisure industry.
In 2021, the national tourism administration’s budget was about 57.3 million euros. Of this total, 28.4 million euros were dedicated to the financial support of SMEs, which was administered by the Austrian Bank for Tourism Development (ÖHT), a specialised bank acting in a public-private partnership with the Federal Ministry of Labour and Economy.
Over 24 million euros were directed to the annual budget of ANTO and 5 million euros were disbursed by the Ministry in the form of individual subsidies for co-financing tourism projects and service contracts. Moreover, around 70 million euros from European Recovery Programme funds were made available as loans to SMEs in the tourism industry.
The COVID-19 pandemic was the key issue of 2020/2021. Comprehensive public support was necessary to help the industry survive. In addition to overall support measures for the economy, the national tourism administration spent 201 million euros on direct grants (administered by the Austrian Bank for Tourism Development) and provided guarantees on loans (cap: 1.6 billion euros) as well as a support scheme for events (cap: 300 million euros) and guarantees for package travel organisers (cap: 300 million euros). Furthermore, in the period from 1st July 2020 to 31st December 2021, a tax relief package was made available with a reduction in VAT to 5% for accommodation and food (previously 10 %) and for beverages (previously 20 %). Additionally, private landlords ("Privatvermieter") and farms offering accommodation services were subsidised by "Agrarmarkt Austria GmbH" until March 2022.
Overall, the larger the business, the more urban the location and the more international the guests, the clearer were the negative economic effects of the crisis. In this case, massive declines in sales, higher liabilities due to bridging finance, depletion of reserves, and a consistent decline in demand – especially in MICE and city tourism – led to significantly lower operating results and even to heavy losses.
In 2023, new funding guidelines for SMEs will be in place with a strong focus on greening the sector and improving financial resilience. In addition to the national budget, all nine federal provinces have their own tourism budgets to support specific programmes.
ÖHT – Austrian Bank for Tourism Development
Since 1947, the Austrian Bank for Tourism Development (ÖHT) has been the most important funding partner of the Austrian tourism industry. It is a specialised funding bank owned by two private banks: the Oesterreichische Kontrollbank AG (OeKB) and the Raiffeisen Group. On behalf of the Federal Ministry of Labour and Economy and in cooperation with the corresponding principal banks, ÖHT supports businesses with subsidised financing, guarantees, grants and knowledge (more than 70 years of experience). Tourism funding is based on directives by the Federal Ministry of Labour and Economy that stipulate all the requirements for the different funding products. ÖHT also links the tourism funding of the Federal Ministry of Labour and Economy with other funding agencies, the nine federal provinces and the European Union and, thus, acts as a "one-stop-shop" for Austrian tourism businesses.
The "Plan T – Masterplan for Tourism" states the importance of a stand-alone tourism funding policy. It also started a process to rethink and renew tourism funding, focusing in particular on family-owned businesses. In 2021, 760 businesses (2020: 585 businesses) were supported resulting in an investment volume of almost 897 million euros.
Examples for the positive effects of supported investment activities:
- In spite of intensive investment activities, funding recipients were, on average, able to decrease the debt repayment period from 13 years in 2014 to 9.3 years in 3-stars-hotels and 10.3 years in 4/5-stars-hotels in 2020.
- The equity ratio of clients has developed positively in the last decade – 4-star-hotels have increased their ratio to 15 % within the last ten years.
- Positive effects on up- and downstream economic sectors: 60 % of investments added a value within 60 km around the investment location boosting the entire region.