The shift in the balance of power in Central European air traffic is gaining momentum. While Bratislava Airport recorded record growth rates of 148 percent in the first quarter due to a massive expansion of Ryanair's services, the tourist destination of Vienna is facing increasing structural challenges.
The Austrian Travel Agency Association, part of the Austrian Federal Economic Chamber, is issuing a strong warning that the rising tax burden in Austria – particularly the air passenger tax and the planned increase in the city tax – is jeopardizing the competitiveness of the capital city. Located in close geographical proximity, Bratislava and Vienna are becoming a prime example of the fierce price competition in the aviation industry. Experts fear that this artificial increase in the cost of travel to Austria will not only affect airlines and airports, but will also have far-reaching negative consequences for the entire tourism value chain, from hotels to regional suppliers.
Expansion of low-cost carriers in the neighboring country
The decision by Irish airline Ryanair to significantly expand its operations at Bratislava Airport sends a strategic signal to the entire industry. Bratislava benefits from a cost structure that is considerably lower than that of Vienna Airport. Ryanair has been calling for the abolition of the Austrian air passenger tax, currently levied at €12 per ticket, for some time. Since this tax is imposed regardless of route length or ticket price, it severely impacts the business model of low-cost carriers. In Bratislava, however, carriers find conditions that allow for aggressive pricing.
Gregor Kadanka, chairman of the Austrian Travel Agency Association, sees this development as a clear warning sign. The figures speak for themselves: While Bratislava Airport recorded a 148 percent increase in passengers in the first quarter of 2026, a decline in passenger numbers is forecast for Vienna. Given the distance of only about 50 kilometers (31 miles) as the crow flies between the two airports, Bratislava is increasingly serving as a cost-effective gateway for tourists who actually want to visit the Vienna region but base their travel decisions primarily on the flight price.
Tax pressure as a location risk for the hotel industry
In addition to the costs of air travel, the planned increase in the city tax in Vienna is causing considerable unrest in the industry. From July 1, 2026, this tax is scheduled to rise from the current 3,2 percent to 5 percent. A further increase to 8 percent is already planned for July 1, 2027. This would almost triple the burden within a short period. For Vienna, which has established itself as a leading global congress destination, this poses a serious risk. Organizers of major events operate with tight budgets, and every percentage increase in ancillary costs can influence their decision for or against a particular location.
The industry association criticizes the increasing misuse of tourism as a tool for balancing public budgets. Higher taxes do not necessarily lead to higher government revenues if, in return, occupancy rates in businesses decline. This affects not only large hotel chains, but especially the medium-sized, family-run businesses in Austria. These businesses often cannot pass on the full extent of rising fixed costs to guests without losing their competitiveness compared to businesses in neighboring countries.
The tourism value chain under pressure
The effects of location policy extend far beyond airport gates and hotel receptions. A weakening of Vienna as a tourist destination has repercussions for the regional economy. Bus companies, tour guides, restaurants, and even craft businesses that depend on maintaining tourist infrastructure rely on the number of international visitors. If travel flows permanently shift towards Bratislava or other Eastern European centers due to pricing, there is a risk of a gradual loss of added value in eastern Austria.
Gregor Kadanka points out that the air passenger tax effectively acts as an economic stimulus program for neighboring countries. Airlines are extremely mobile and can redistribute their capacity to more profitable locations within a few weeks. The speed with which Ryanair and other low-cost carriers react to fee increases underscores the need for a location policy that understands tourism as an engine of growth and not merely as a source of budget revenue.
Demands for structural relief
To reverse the negative trend, the Chamber of Commerce is calling for an immediate change of course in tax policy. Key points include the complete abolition of the air passenger tax and a halt to further increases in accommodation rates. Only by significantly reducing ancillary costs can Vienna maintain its position as a premium destination without falling completely behind in terms of price. The industry advocates for a location policy that strengthens businesses and creates incentives for investment, instead of burdening them with ever-increasing taxes.
The coming years will be crucial in determining whether Vienna can maintain its status as an international hub and tourist magnet. The competition with Bratislava exemplifies that geographical advantages alone are insufficient when fiscal conditions diverge. The aviation and tourism industries are therefore urging a comprehensive strategy that prioritizes Austria's competitiveness. Should prices continue to rise, there is a risk that passenger traffic will permanently bypass Vienna Airport, instead utilizing the more affordable infrastructure of neighboring countries.