Background to the study
Tourism is one of the key pillars of the Austrian economy. It ranks as a major export product in the country. The sector contributes approximately 15% of the total Gross Domestic Product [GDP] and 18% of the total export receipts. The sector has shown remarkable growth over the past 15 years.
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A report released by the Austrian Economic Chamber in 2013 shows that 33% of the tourists’ total expenditures is spent on accommodation. Moreover, the sector accounts for over 7.3% of the total employment (Hotel News Now 2013). This realisation shows that Austria’s tourism industry will experience a significant growth in the future.
Austria is among the most popular tourist destinations. The country has four main seasons, which include city tourism, health tourism, winter tourism, and summer tourism. However, the summer and winter tourism seasons are the most popular. The city tourism season mainly attracts tourists who travel for business, cultural, convention, and congress reasons.
Other aspects that make Austria attractive include the hiking, skiing, and mountaineering resorts. Austria’s tourism officials intend to stimulate industry growth by marketing its services to emerging markets in Eastern and Central European countries such as Czech, China, Russia, Brazil, Middle East, India, Poland, and Hungary (Hotel News Now 2013).
However, effective policy formulation and planning are critical elements in the success of the tourism industry. One of the policy aspects that the Austrian government has taken into consideration relates to the environment. Subsequently, the government has integrated environmental sustainability as one of the core components.
Aim and scope
This report intends to conduct a critique of the tourism policy and planning in Austria. The report specifically focuses on Austria’s tourism sector.
Despite the growth of the Austrian tourism industry over the past years, in terms of its contribution to the country’s GDP, its global market share has dwindled remarkably. Since the occurrence of the recession in 2009, the sector’s total revenue has declined significantly as compared to other 15 European Union countries as illustrated by figure 1 below.
However, the real revenue grew with a margin of 1.2% year-on-year. By the end of 2012, the total real revenue had increased to 5.91% from a low of 5.87% in 2011. The chart below shows the trend in Austria’s market share in comparison to 15 EU states.
A study conducted by the Federal Ministry of Economics shows that the growth of Austria’s tourism sector revenues has nearly stagnated as compared to the GDP. Tourism revenues have grown by an annual rate of 0.3% over the past 10 years, which is lower as compared to the 1.6% growth in real GDP (Hotel News Now 2013).
Source: (Hotel News Now 2013)
Currently, the industry can be regarded to have reached its maturity and hence the stagnation in its growth. The low rate of growth has adverse effects on the sector’s financial capacity. Lack of adequate investment in the sector by both the government and private investors reduces the sector’s competitiveness, hence the decline in its market share.
Tourism planning and policy
Goeldner and Ritchie (2009, p. 232) argue that tourism planning ‘seeks to provide a detailed on the ground outline on how each of the factors affecting the success of a tourism destination should be developed’. Planning does not only focus on how a country can maximise the revenue generated from tourism.
However, it goes beyond such schemes and takes into account the social and economic benefits that society can derive. Subsequently, it is critical for policy developers to take into account how tourism planning can lead to improvement in the society’s welfare and happiness (Dredge & Jenkins 2011).
In a bid to achieve this goal, tourism planning should incorporate various issues such as quality architectural, planning for an effective transportation system, environmental design, and landscape and energy conservation.
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Other issues that should be taken into account relate to implementation of effective interpretation systems, land-use management, and creation of information. Goeldner and Ritchie (2009) further contend that tourism planning and policy are strongly correlated. Subsequently, the two aspects are concerned with how a particular economy can improve the attractiveness of its tourism destinations.
Issues faced by the Austrian tourism industry
The Austrian tourism industry is not shielded from challenges originating from the macro environment. Currently, the industry is facing a number of problems, which might hinder its long-term growth and success. Some of the main issues relate to climate and demographic changes.
Winter tourism is one of the key components of the Austrian tourism industry. Skiing is one of most important aspects that enhance winter tourism in the country. Steiger (2012, p, 867) contends that the ‘future development of skiing tourism is essential for Austria’s rural and peripheral areas and their social-cultural, economic well being, and the overall performance of the entire economy’.
The performance of winter tourism amongst countries in the Alp region is greatly dependent on the prevailing weather and climatic conditions. The prevailing climate is a key component in winter tourism planning process.
Climate change is considered as one of the long-term challenges, which might affect the competitiveness of various tourist destinations adversely. Recent scientific propositions show that Austria may experience a 6.4o increment in its average temperature by 2099. This change will emanate from the high rate of climate change. Furthermore, the volume of precipitation is expected to change remarkably.
These changes will not only affect winter tourism, but also city tourism. For example, the change in the prevailing climatic conditions may lead to decline in water quality due to increased algae growth (United Nations Environment Programme 2011).
The rise in temperature levels might also affect summer tourism. First, the summer period will be relatively longer. The occurrence of heat waves might complicate the season.
For example, the high temperatures might lead to loss of Austria’s distinctive landscape through various processes such as extinction of biodiversity such as edelweiss, which is a key tourism component, thawing of permafrost soils, and glacier retreat.
It is estimated that biodiversity attracted over 79% of the total number of summer tourists. Subsequently, there is a high probability of Austria losing its touristic attraction during the summer.
Climate change may also lead to instabilities in some of the country’s infrastructures such as road transport due to melting of permafrost. The changing snore conditions in the alpine mountain will force low-lying ski resorts to move up the mountains in order to reach the steady snow blanket.
There are 609 Alpine ski resorts in France, Germany, Switzerland, and Austria under the current climatic conditions. These areas are naturally snow-reliable. However, the high rate of global warming will significantly diminish their reliability.
Source: (Austria 2014)
The Austrian tourism industry is also facing a major issue emanating from the high rate of demographic changes. A report by the European Travel Commission [ETC] outlines a number of the major demographic issues that are facing the tourism industry today.
One of the issues identified relates to increment in the world’s population. Approximately, the total world population will increase from 6.9 billion in 2009 to 8.3 billion in 2030. However, the growth will not be uniform. Some regions will experience growth while others will expereince a decline.
It is expected that Austria will experience a population increment in some of its cities such as Innsbruck and other suburban areas. This change will emanate from the high rate of interregional migration. The population increment in the urban areas will put pressure on the available land for building tourist resorts. The increment in population will also force the Austrian to improve transport infrastructure.
The high rate of demographic change is also a perfect opportunity for Austria to target new groups. One of the tourism groups that the Tourism Ministry should focus on includes the 50+ generation. The rate of mobility amongst this group has increased remarkably as compared to 15 years ago. Furthermore, they have a higher disposable income as compared to the average population (Breibbia & Pineda 2006).
Analysis of Austria’s tourism policy and planning
Austria has recognised the role of environment in enhancing the growth of its tourism sector. Subsequently, the government via the ministry of Agriculture has integrated the concept of environmental sustainability in its tourism planning and policy formulation process through the Federal Ministry of Environment, Water Management, and Forestry (Steiger & Stotter 2013).
One of the aspects that the policy focuses on entails reduction of the greenhouse gases such as carbon dioxide. In the course of implementing this policy, the Austrian government has proposed a number of aspects some of which include enforcing the utilisation of biofuels as a source of energy coupled with integrating more efficient and environmental friendly mobility technologies.
Moreover, the Austrian government is also promoting Alpine Awareness, which mainly entails using public means of transport and travelling by bicycles (United Nations Environment Programme 2011).
Health and wellness tourism
Tourism has undergone a significant change in the recent past. One of the changes relates to the view that tourists are shifting from traditional forms of tourism to new forms. Currently, travellers increasingly prefer to travel to destinations that can aid in improving their health. Furthermore, travellers are opting to travel with the aim of enhancing their personal well-being.
In an effort to exploit the prevailing demographic changes, the Austrian government has incorporated health and wellness tourism in an effort to attract the older generation of travellers. Austria has experienced a remarkable growth in the volume of inbound international wellness tourism over the past few years.
An effective travel policy is critical in stimulating the growth of tourism. One of the avenues through which a government can stimulate its tourism growth entails minimising formalities that are involved in the process of applying for travel documents such as passports and visas.
Previously, travelling to Austria was hindered by currency exchange limitations, visa formalities, and stiff custom regulations. However, the country has made remarkable growth with regard to travel (Travel & Tourism 2014).
One of the changes that have been implemented relates to the adoption of the multilateral agreement commonly referred to as the Schengen Agreement, which was established in 1985. The agreement provides individuals of the signatory states to travel freely within the member states. The Schengen cooperation was integrated in the EU in 1997 in an effort to promote tourism within the region.
Despite this move, not all EU member states are signatories to the Schengen Agreement. Some of the factors that explain the lack of entry into the agreement relate to view that they desire to have control over their borders or they have not fulfilled all the required conditions (Europa 2014).
Austria’s membership to the Schengen Agreement has played a critical role in promoting the growth of the tourism industry by allowing free movement of people within the member state. Despite this aspect, not all EU member states are members of the Schengen area and this scenario hinders the flow of international tourists from such EU member states.
Most travellers perceive visas as a formality that imposes cost. In a bid to attract tourists from such EU members, it is imperative for the Austrian government to consider how it can adjust its plan and implement an attractive travel policy (Europa 2014).
Creating sufficient awareness regarding a particular country’s travel destination is critical in the success of a country’s tourism industry. However, Austria has not been effective in improving the level of market awareness. First, the country has relied on traditional modes of creating awareness for a long time. For example, most shopping destinations advertised are street markets.
However, the information does not reach all the intended visitors. Moreover, most individuals perceive Austria as a cold country, which is characterised by snow and cold weather. This perception has arisen from the view that most marketing advertising campaigns include pictures of snow.
Therefore, other tourist attraction sites such as the green sceneries and other sites, which can attract summer tourists, are omitted. This aspect shows that the Austrian Tourism Ministry is not effective in planning and implementing its marketing advertising policy.
This report shows that tourism forms an important component in Austria’s economic growth and development. First, it is a major source of export revenue in addition to being a source of employment to a significant proportion of Austria’s labour force. Subsequently, it makes a fundamental contribution to the country’s GDP. Over the past few years, the industry has experienced a dwindling performance.
However, the potential for growth is relatively high. The poor performance is associated with a number of challenges. One of the major challenges relate to the high rate of climate change, which presents a threat to the survival of the city, summer, winter, and health tourism.
Another major change relates to the changing demographic structure. In a bid to deal with these challenges, it is imperative for the Austrian government to be effective in its tourism planning and policy formulation. The planning and policy formulation process should focus on changes emerging from the market. This move will improve Austria’s competitiveness in the global tourism industry, and hence its market share.
In its pursuit to promote the growth of tourism, it is imperative for the Austrian government to take into account the following.
Marketing – the Austrian government should consider improving its marketing capability. The Tourism Ministry should incorporate the Integrated Marketing Communication concept. This aspect will entail combining both traditional and emerging marketing communication methods and mediums.
Moreover, the marketing communication strategy should focus on other tourist attraction sites in the country rather than focusing on the Alps.
Subsequently, the travellers’ impression of the country being a cold travel destination will change, hence improving the volume of other categories of tourists such as city and summer tourists. In the process of designing the marketing campaigns, Austria should consider targeting customers of diverse demographic characteristics such as the elderly.
Trade agreements – In a bid to increase the volume of tourism traffic from non-signatories of the Schengen Agreement, it is important for the Austria’s tourism ministry to consider entering into regional trade agreements with such countries. Some of the issues that Austria should focus on include eliminating travel barriers, for example, by minimising the travel document requirements.
Infrastructure- Austria should improve its transport network into the tourist attraction sites and resorts by improving its tourism transport management. This move will play a critical role in enhancing mobility amongst the elderly.
Diversification of tourism products – considering the change in tastes and preference amongst tourists, it is essential for Austria to consider diversifying its tourism package. One of the ways through which this goal can be achieved is by targeting emerging trends such as health and wellness, which has undergone remarkable growth over the past decade.
Environmental sustainability – the Austrian government should improve its environmental protection policy. This move will play an essential role in ensuring that the tourism attraction sites and destinations are adequately protected from the high rate of climate change.
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