In 1983 the Socialist government fell, and Socialists were forced to form a coalition with the far-right Freedom party. In 1986 the Socialists (now the Social Democrats) and the People's party again joined together in a “grand coalition” that retained control of the government through the 1990s. Social Democrat Franz Vranitzky was chancellor from 1986 to 1997, when he resigned and was replaced by Viktor Klima. In the Oct., 1999, elections, the People's party placed third, just barely behind the far-right Freedom party, whose leader, Jörg Haider, has been critized as demagogic. The results complicated the formation of a new government, which still was not achieved by Dec., 1999, when Klima sought to re-form the Social Democratic–People's party coalition.

Austria captured world attention in 1986 when former United Nations Secretary-General Kurt Waldheim was elected president despite allegations that he had been involved in atrocities as a German army staff officer in the Balkans during World War II. Waldheim was succeeded in 1992 by Thomas Klestil, the candidate of the People's party. Austria began a partial privatization of state-owned industries in the late 1980s and entered the European Union in 1995.

2. The tourism industry as a part of the Austrian economy

The majestic Alps, plentiful forests, 88 lakes and a considerable network of rivers all add to Austria’s natural beauty and vibrant countryside. As a popular holiday destination in Central Europe, Austria plays host to visitors from all over the world. Thus, tourism plays an important role in the Austrian economy.

2.1 The Organizational Structure

According to a federal principle of the Austrian constitution, each of the 9 Austrian Federal Provinces is responsible for its own tourism. At the provincial level, tourist boards and a special division of the provincial governments conduct tourism.

Although the constitution itself allocates responsibility for tourism to the federal provinces, the Federal Government is held accountable for the general economic policy, public transport, financing instruments and subsidies - all questions which are directly or indirectly related to tourism.

The marketing activities in Austria’s tourism industry are provided by the "Austrian National Tourist Office"(ANTO). The Austrian Federal Government, the local governments of the 9 provinces, and the Austrian Economic Chamber are affiliated to the ANTO.

With a budget of around 44,743 mio. in 2001, the Austrian National Tourist Office strives to promote Austrian tourism on both the domestic and the international levels. To this end, it maintains 24 representative offices in all major incoming-tourist countries of the world, 4 marketing offices and several representatives/tourism managers and honorary representatives in a number of other countries (approximately 80 representatives in total).

2.2 Economic Significance

Austria's tourism and leisure industry plays a vital role in the Austrian economy. In 2002, the total foreign currency earnings from tourism amounted to approximately 14,13 million € (+5.5% compared with 2001). Thus, tourism accounts for 18,6% of Austria's total export earnings, for some 6,5% of the GDP and employs some 500,000 people. In terms of the per capita income in foreign currency from tourism, Austria is at the reign with annually approximately 1,400 €.

The number of beds and the number of overnight stays are the most important statistical indicators to measure the performance of tourism. The Austrian registration system ensures accurate statistical data. In 2002, approximately 1.151 million guest beds were registered.

In the same year, the number of overnight stays amounted to 116,8 million. Visitors from abroad accounted for about 85,79 million and domestic guests for about 31,01 million (comparison to 2001: +1,5% in total). Thus, foreign visitors represented 73.4% of the total overnight stays in 2002. Austria is again among the top tourist destinations.

Another important statistical indicator is the number of arrivals: In 2002 they amounted to 27,36 million (resulting in a plus of 1.7% compared to 2001 or approximately 465,882 more than the previous year). The guests stayed an average period of 4.27 days, which resulted in a 26.6% occupancy rate of guest beds.

Number of Arrivals and Average Staying Period (1976-2002)

Foreign currency receipts amounted to about 14,13 million € in 2002, which, with + 25.3% (the 10,97 million € the Austrians spent abroad already deducted resulted in no trade balance deficit in 2002. Thus, the tourism industry, for once, completely balanced Austria's traditional trade deficit and resulted in a surplus of 170 million €.

Traditionally, the vast majority of tourists come from Germany - in 2002 they accounted for approx. 53,52 million overnight-stays (around 62.4% of the total and +/- 2% var.):

Countries of Origin: Share in Bednights 2002

2.3 Trends in Austrian Tourism

In an industry of constant change, Austrian tourism must always remain flexible in its reaction to new tourist trends.

Perhaps one of the most remarkable trends is the increased influx of visitors from outside the German-speaking countries.

Other trends include an increase in shorter holidays each year, demands for higher quality accommodation and city tourism.

Warmly welcomed by the Austrian tourism industry, these trends fit perfectly into the planned policy which seeks to improve quality standards and to diversify the incoming tourist country of origin.

Less welcome trends such as the strong move from summer season holidays towards winter season holidays, pose real problems for enterprises which depend on only one season for business - mainly the summer season. While winter tourism accounted for only 33.7% of total overnight stays 23 years ago (1979/1980), 2001/2002 showed a shift in favour of winter with 56.3% of total overnight stays.

The trend toward higher quality accommodation makes things more difficult and creates problems for a large number of lower category hotels and private accomodation.

Number of Beds in One to Five Star Hotels 1990-2002 1 to 5 Star Hotels

In terms of long-term development, the experts speak of a normalizing effect since 1973: the preceding period brought yearly touristic growth rates of 6 to 10%, with top rates at almost 15%-rates, which could not have been maintained for any length at time without a harmful impact on the environment. Since then, the growth rates have decreased and were even negative on a few occasions. Nevertheless, a modest increase was on average maintained and should continue in the foreseeable future.

Austria’s official tourism policy goes under the motto "Quality before Quantity". This means, for example, that public financial subsidies to touristic enterprises are only granted if the planned investment promises to improve quality standards instead of enlargening the quantitative capacity.

Many efforts have been made in recent years to provide a wider range of tourism facilities in order to attract new target groups (i.e. groups in search of entertainment, amusement and leisure activities). Since the number of tourists seeking minimal activity during vacation is declining, Austria now offers 900 indoor swimming-pools, 22,000 kms of prepared alpine ski-slopes, 16,000 kms of cross-country ski trails, 60 wild-life parks - to mention only a few examples.

To sustain its success in a changing Europe, Austria must open up new markets for prospective tourists from overseas and from Eastern European countries.

The tendency towards "quality tourism", which increasingly demands highly qualified personnel, will continue.

2.4 The tourism labour market

Demand for highly qualified personnel in tourism is still very high. Taking labour market statistics as an indicator for the demand for specialized qualified personnel in this field, it appears that there is still an above-average demand for jobs in tourism.