VIENNA—After years of inactivity, Vienna’s sparse global branded 5-star footprint is expanding and will continue to do so throughout 2013 and early 2014.
Traditional names such as the Sacher, Imperial and Bristol have dominated Vienna’s luxury hotel history, along with some unique small high-end properties. Now a “raft” of new hotel companies is investing in the city, tapping into its new tourism potential and demand for 5-star brands, according to Astrid Pockfuss, media manager for the Vienna Tourist Board.
“Vienna’s hotel industry is booming at the moment, particularly the premium segment with a constant flow of new rooms coming onto the market,” she said.
A host of recent and pending newcomers include the 202-room Ritz-Carlton, Vienna (August 2012), the 304-room Kempinski in the Palais Hansen building (March 2013), Sol Melia’s 255-room ME Vienna (fall 2013) and a 143-room Park Hyatt (early 2014).
“Among the projects slated to open a little further down the line in 2015 are a 320-bed Four Seasons hotel in the city center (first district), and a 128-room Hotel im Palais Schwarzenberg in the third district,” Pockfuss added.
“The bed count of 58,100 end of December (2012) is set to rise to 62,300 by the end of 2013, and 63,500 by the end of 2014,” she said.
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| Gabriela Benz GM, Le Meridien Vienna |
Gabriela Benz, long-time GM of the Le Meridien Vienna, sees great room for growth in Vienna. “The market situation is stable and promising. The real estate market, which has been relatively quiet for a long time, is now on the move. Many brands, which according to reports have been looking for years to find an adequate location, have now found suitable offers.”
Global tourism
Benz said the city’s emergence on the global tourism scene has meant a move away from traditional, family-run luxury hotels to the more familiar global brands.
“Furthermore, the luxury brands are reaching affluent new tourism markets, which correspond strongly with Vienna’s mix of culture, history, high quality of life and safety—and its place as a high-class destination,” she added.
Benz said it remains to be seen whether there is adequate demand to soak up the surge in supply and believes the need to stand out will intensify.
“The demand has not grown the same way hotel rooms have, but the new competition is stimulating,” she said. “A successful marketing plan of two years ago has probably lost most of its value by now. It is of utmost importance to provide a unique positioning. If everyone throws themselves at the same market segment, it won’t be an easy market for anyone.”
Figures from STR Global, sister company of HotelNewsNow.com, point to growth. In February, during which Vienna recorded a 5.2% year-on-year change in luxury class hotel supply, occupancy was up 2.1%, average daily rate grew 6.6% and revenue per available room increased 8.8% in euro terms.
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| The 304-room Kempinski in the Palais Hansen building joins Vienna’s traditional luxury offerings. |
A major luxury entrant came with the opening of the first Austrian Ritz-Carlton last August on Vienna’s imperial-era Ringstrasse. Its 202 rooms—one-fifth of them suites—are spread throughout four landmark palatial buildings on the landmark boulevard, together with the Ritz-Carlton Club level, a rooftop bar-lounge, Guerlain Spa and Austrian gourmet experience at Dstrikt restaurant.
Hotel GM Matthias Vogt said the Ritz-Carlton Hotel Company took a decade to find the right location and establish a presence in Vienna.
Vienna’s potential
The group wants to tap into the city’s potential, with its stable economy and high-ranking quality of life.
“The tourism industry is very strong and year-on-year visitor numbers are higher than expected,” Vogt said. “Private and business travel is increasing and congress tourism is traditionally very good. Since Vienna is situated in the heart of Europe and also the gateway to Eastern European countries, the city is of interest to many international companies.
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| Matthias Vogt Ritz-Carlton, Vienna |
“I think this is the same for other international hotel companies. They wanted to come to Vienna but had to wait for excellent locations. As many prime real estate opportunities arose over the last few years, they grabbed at that chance like us to enter the market,” Vogt added.
The GM said he believes the market developments will be self-fulfilling in terms of hotel demand.
“Many young people are traveling nowadays and love their small boutique hotels, which is contributing to the growth in that segment. The demand is certainly here, and now that Vienna offers more international luxury hotels and small boutique hotels it will be even more attractive for the affluent and discerning travel.”
Stephen Haggerty, global head of real estate and capital strategy for Hyatt Hotels Corporation, also stressed Vienna’s geography and blooming property opportunities in the decision to open the 143-room Park Hyatt on Vienna’s United Nations Educational, Scientific and Cultural Organization’s classified Am Hof square in mid-2014. The property is the brand’s seventh in Europe and its first in Austria.
“Vienna’s central location within Europe has helped to establish the city as a hub to Central and Eastern Europe with a strong market for business and leisure travelers,” he said. “Hundreds of international companies have their Eastern European base there, and the city offers multiple convention and large-scale meeting facilities.
“Despite its fantastic location, it has the same kind of barriers to entry found in many European cities including a lack of space to build in city centers and building restrictions. Because of that, the number of hotels in the city hasn’t grown significantly in the past decade,” he said.