Brothel compensation in Austria – could the 16 million euros have been better used?

A new story was published in Der Standard a few days ago about COVID compensations for brothel-owning companies. According to the cited ZackZack, red light district businesses received significantly larger amounts than the average.

The governmental agency for COVID compensations, COFAG, explained this discrepancy through industry structure.

The COVID pandemic hit the industry hard

As we reported on Sex Vienna, brothels had to close their doors due to governmental regulations. Sex clubs and similar venues were viewed as places where people could come into contact with each other, thus posing a high risk for virus transmission.

The mandatory closure hit the industry hard, with many companies going bankrupt while others lost substantial amounts of money. Austria introduced the COVID-19 Finanzierungsagentur des Bundes GmbH (COFAG) to oversee and distribute compensations for COVID-related losses.

Brothels were eligible for compensation, and public records now show that 38 brothel businesses received 16 million euros between 2020 and 2022. These compensations covered sales compensation and fixed business costs.

On average, red light district companies received 260,000 euros, while the overall average for Austrian companies was 34,600 euros. COFAG explained the significant difference by noting that in industries with large and high-turnover operations, they tend to receive higher average funding than industries with weaker turnovers and typically smaller operations.

According to publicly available payment records, the Golden-Time Group received the largest share of state aid, amounting to more than 2.5 million euros to compensate for losses at their two locations in Vienna and Linz.

The financial compensation was not used for modernizing the clubs

There’s no doubt that the COVID pandemic severely impacted the red light sector in Austria, especially in Vienna. The state government endeavored to assist all affected companies, including brothel operators.

However, given the substantial amounts some companies received, a pertinent question arises: Was the compensation (or at least a portion of it) used to modernize the brothels? Business owners should consistently enhance their services, and the world of sex clubs is no exception.

Examining the Goldentime sauna club in Vienna, there don’t appear to be many changes. We can’t determine why, but it’s somewhat disappointing that substantial sums were disbursed without guests reaping any noticeable benefits.

Do you share this view or have a different perspective? Share your thoughts in the related Sex Vienna Forum thread, here: Could Austria’s 16 Million Euro Brothel Compensation Have Been Used More Effectively?

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