Vienna hoteliers oppose planned tourist tax rise to 8 percent

Vienna’s hotel industry is urging the city to stop a planned increase in its tourist tax, warning that the rise could threaten the viability of some businesses. ORF reports that the rate is due to increase from 5 percent to 8 percent in July 2027.

The tax, which applies to hotels and short-term rental providers, was revised as part of budget consolidation. It rose from 3.2 percent to 5 percent in July. An earlier plan to set the rate at 8.5 percent at the end of 2025 was changed after criticism from the tourism sector, with new rates introduced in stages.

Representatives of Vienna’s hotel industry in the Austrian Economic Chamber and the Austrian Hotel Association have now called for the second increase to be cancelled. They say it could cut businesses’ revenue and leave some at risk of closure.

Vienna’s economic affairs councillor, Barbara Novak of the Social Democratic Party, said the staged increase was agreed at a tourist tax summit in September 2025, with the chamber and hotel association involved. She said reversing the next step would challenge a compromise reached with the industry and argued that predictability was important for Vienna’s tourism sector.

Novak said overnight stays and tourism revenue had been rising over the long term. More than 80 percent of overnight visitors to Vienna come from abroad, she said. The tax is not legally reserved solely for tourism; its revenue also helps fund public transport, infrastructure, green spaces, the cityscape and tourism, services used by visitors and residents alike.

The hotel industry cited lower occupancy and room rates. In August 2026, 74.1 percent of rooms were occupied, down from 75.3 percent a year earlier. The average room price fell to 114.1 euros from 115.6 euros, said Alexander Ipp, vice-president of the Austrian Hotel Association in Vienna. He said revenue was falling while costs were rising.

Vienna Tourism director Norbert Kettner rejected the warnings, telling the Austrian Press Agency that hotels in the city were nearly fully booked at the time, partly because of two large medical congresses. Vienna also had the highest occupancy rate of Austria’s federal states, he said, adding that the city was gaining market share in Europe and competing internationally.

Kettner said a percentage-based tax placed a more even burden across different price ranges and had less effect on bookings, citing a study by Munich University of Applied Sciences. He also argued that price played a smaller role in demand for urban destinations with major cultural and social attractions. The opposition People’s Party councillor Kasia Greco backed the hotel industry’s call to stop the increase.