"The prosperity of Austrians is threatened by a shortage of tourism workers."

Tourism needs more seasonal workers from third countries. State Secretary Susanne Kraus-Winkler calls for a "completely new solution" for the labour market.

The tourism sector has learned how to deal with crises, according to Susanne Kraus-Winkler (ÖVP), State Secretary. She hopes banks will postpone repayments to businesses if necessary, but does not expect a wave of insolvencies. To alleviate the prevailing labour shortage, the State Secretary calls in the STANDARD interview for "a completely new solution to the issue of seasonal employment - more flexible, more practical". Austria will not be able to avoid employing more third-country nationals in the medium term.

STANDARD: A ski resort near Mont Blanc in France has recently closed again due to a lack of snow. Is this an isolated phenomenon or should we be prepared for more closures of Alpine ski resorts?

Kraus-Winkler: There will be changes because of climate change. In Austria, we have the advantage of being in an area of the Alps where there are 320 glaciers in the Tyrol alone, and we have a very well developed ski and snowmaking infrastructure, one of the best in the world. We do not assume that ski resorts have to close.

STANDARD: The booking situation at Christmas and New Year's Eve was good or very good, and it looks like a new record number of nights will be within reach this winter. Has the crown virus outbreak finally been digested?

Kraus-Winkler: The crown epidemic per se, yes. We have learned to treat it like a cold or a mild flu. What we have not yet digested is that immediately after the crown we were faced with a series of crises that presented us with a wide variety of challenges.

STANDARD: Few industries have as much experience of crises as tourism. There has hardly been a year without avian flu, a volcanic eruption or a war that has caused uncertainty.

Kraus-Winkler: Tourism is resilient, it has learned to deal with crises. And the great thing is that it always recovers quickly after a crisis. Maybe also because travel is so much part of our DNA that we don't want to do without it.

STANDARD: But has the Crown virus also affected the profitability of companies?

Kraus-Winkler: This still needs to be worked through. We are still struggling to get the sector back to pre-pandemic levels. Without the crown we would actually see completely different, much better numbers.

STANDARD: Insolvency figures in Austria have risen sharply recently, but hardly at all in tourism. Why is this so?

Kraus-Winkler: There is a distinction between the hospitality industry and the hotel industry. There are traditionally more insolvencies in the hospitality industry. These are often rented businesses that have cash flow problems and have to close. In most cases, a new tenant reopens the business shortly afterwards.

STANDARD: And in the hotel industry?

Kraus-Winkler: Here we are dealing primarily with owner-managed businesses where the property is on the balance sheet. Despite the low equity, the constellation is different there. The various Covid bridging grants that have been provided have helped many companies through the crisis. Business then bounced back quickly.

STANDARD: Did the influx of money at the time of the Crown mean that businesses survived that would normally have had to close?

Kraus-Winkler: That theory still stands. But if such a business exists in the market now, it could not have been that bad before, I am sure.

STANDARD: Do you expect another wave of bankruptcies in the hotel industry?

Kraus-Winkler: I would rule out a wave. If there are going to be defaults, they will be from businesses that have variable interest rates and have cash flow problems because of high interest rates. If interest rates go down by 50 basis points next year, as some people expect, that would be a signal to the banks to say, okay, let's suspend repayments for two years to give the businesses affected some breathing room. But the big problem for businesses is staff costs, which in some cases are already running at 40 per cent or more.

STANDARD: Energy costs are still high, although not as high as a year ago. The energy cost subsidy is intended to cushion this. How many businesses have applied so far?

Kraus-Winkler: A total of 24,000, which is the latest figure for all sectors, including of course hotels and catering.

STANDARD: Businesses are eligible if they can show that their profits before interest, tax, depreciation and amortisation are at least 40% lower than in 2021.

Kraus-Winkler: Wrong reference year because there were a particularly large number of closed days.

STANDARD: Was there a deliberate attempt to narrow down the beneficiaries?

Kraus-Winkler: That was not the intention. But we're not alone in government, concessions have to be made in order to make progress.

STANDARD: We're already into the winter season, but some companies are still actively looking for workers - and can't find any. What's wrong?

Kraus-Winkler: Anyone who wants to work in the winter season has already chosen a company that looks the most interesting to them. The less popular companies have problems. Companies have to learn, they have to start looking earlier and they may have to look in a different way.

STANDARD: There are already service restrictions here and there due to labour shortages. Not exactly a good reputation for a tourist country like Austria?

Kraus-Winkler: In the medium term, we will not be able to get around third-country nationals, especially because they are looking for work not only in Austria but throughout the EU.

STANDARD: Does this apply mainly to the Western Balkans?

Kraus-Winkler: Currently, the majority of third-country nationals working in tourism come from Bosnia and Herzegovina and Serbia. Countries such as the Philippines are international intermediaries for skilled workers and specifically train tourism workers for the whole world. This is where we come in.

STANDARD: If they could do what they want ...

Kraus-Winkler: ... I would try to find a completely new solution to the issue of seasonal employment, more flexible, more practical.

STANDARD: What's stopping you?

Kraus-Winkler: A lot of people talk about the labour situation. As is so often the case in Austria, people are afraid of a worse solution than the current one, which will ultimately make major reforms impossible. This is unfortunate. After all, labour shortages in tourism also mean a loss of prosperity. If there is less turnover, tax revenues fall - it is a vicious circle.

STANDARD: If you had one wish for 2024, what would it be?

Kraus-Winkler: To stabilise the economic situation, to bring down inflation and therefore interest rates faster, to keep demand strong and to find modern solutions for the labour market from third countries that work quickly and efficiently.

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