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Austria's Hospitality Sector Sees Revenue Dip, VAT Reduction Proposed

Revenue in Austria's hospitality sector is down, and the industry is pushing for a VAT reduction to stimulate growth. But will the proposal gain traction?

, and Administrator

2025 October 21 . 10:03 AM

1 min read

In this picture there are group of people, they are sitting around the table to the right and left... — In this picture there are group of people, they are sitting around the table to the right and left side of the image and there are food items on the table, there is a glass door at the center of the image it seems to be a hotel.

Restaurant and hotel sales drop in August - Austria's Hospitality Sector Sees Revenue Dip, VAT Reduction Proposed

The hospitality sector in Austria has witnessed a dip in revenues. Restaurants and bars saw a 0.6% decrease in August compared to July, and a 3.7% drop compared to the same period last year. Hotels and accommodation providers also experienced a 1.8% decrease month-on-month and a 3.7% decrease year-on-year. Meanwhile, a proposal to reduce value-added tax on food from 19% to 7% has been suggested to boost the industry.

The catering industry is hoping for a VAT reduction next year. Wifo Chief Gabriel Felbermayr proposed lowering the reduced rate from 10% to 5%, citing examples from other EU countries. However, this proposal faces opposition from Finance Minister Markus Marterbauer and other political actors due to budgetary concerns. Despite the challenges, Vice Chancellor Andreas Babler has expressed willingness to consider the proposal.

The recent revenue decreases in the hospitality sector come amidst ongoing economic uncertainty. Both restaurants and bars, as well as hotels and accommodation providers, have seen significant drops in revenue compared to the same periods last year.

The hospitality industry in Austria is grappling with reduced revenues and is seeking a VAT reduction to stimulate growth. While a proposal has been made, its implementation remains uncertain due to budgetary concerns. The industry will continue to monitor the situation and advocate for supportive measures.