Labor shortage in tourism and its impact on the industry and location

On behalf of the Austrian Hotel Association, EcoAustria has investigated the current labor shortage in the accommodation industry and its economic impact, especially in connection with the measures to contain COVID-19. While the restrictions during the pandemic severely impacted the industry, businesses are now facing the challenge of participating in the resurgent tourism boom, which is made more difficult by a shortage of labor.

Previous survey results from the Austrian Hotel Association show that industry turnover could fall by around 7.4% if the staff shortage is not resolved. This decline in turnover is the result of staff shortages, which lead to a reduction in operating services. As a result, the demand of tourism businesses for inputs decreases, which in turn reduces the demand for suppliers. The estimates show a potential decline in gross domestic product of EUR 1.2 billion and a reduction in employment of 9,500 full-time equivalents, which also leads to a reduction in public sector revenue.

To meet this challenge, various measures are proposed, including the smoothing of seasonality in tourism, the activation of domestic and foreign labor potential and the increased use of new technologies. These include a reorientation towards year-round active tourism and support for digital nomads in order to reduce seasonality, as well as making places of residence more attractive for tourism workers. Furthermore, the simplification of processes for foreign workers and the increased use of new technologies are recommended, whereby the financing and expansion of broadband infrastructure in tourism regions should be seen as key.