Assuming the visa is for tourism purposes and that I am not currently in Austria, the requirements should be similar to those in Portugal. A "sponsor" doesn't necessarily mean someone who will pay for you; it could simply be a friend's place (host). In such cases, here in Portugal, it is mandatory to have an invitation letter written by the host, confirming that you will be staying at their place during your visit.

I'm no expert but the case could be made that because you don't stay in a hotel, your friend is therefore financially sponsoring you, by providing you with a place to stay.

Also, if I remember correctly from my days of travelling with a weak passport, the invitation letter is not just a handwritten letter, but an official document your host will have to get from the immigration office, fill out, and send to you. It's straightforward but not be hassle-free, as they will have to provide a proof of address, bank statements etc, to get one issued. (Find more information here 🇩🇪)

That's why it's sometimes easier just to book a hotel room for the duration of your stay, and cancel after you get your visa. You still take the hotel reservation with you, for when you go through immigration at the airport, in case they ask you to show a proof of accommodation, but don't worry, they won't call the hotel to check.

In your case, you should fill in Section 32 of the visa application form as follows:

Cost of traveling and living during the applicant’s stay is covered by: - Select “by the applicant himself/herself.”

Accommodation provided: - Since you will be staying with your friend but they are not financially sponsoring your visit, you should still indicate that accommodation is provided. - You can check the Accommodation provided box and clarify that it is by a host (your friend), without any financial sponsorship.

It’s important to provide clear information to avoid any confusion. You might also want to include a cover letter explaining that your friend will be providing accommodation but not financial support for other expenses. This way, the consular officers will have a complete understanding of your situation.

Welcome to the EU!

We can't have homeless bums littering the streets in our woke socialist paradise, so we have to make sure you can keep up with the high costs of living here.

That being said, it seems like you're covering the costs by yourself, so you tick the left checkbox. The right one is, I imagine, for when you're on a business trip with everything paid for by your employer.

Sponsor just means the person that is hosting you. Could be a friend or family member you are visiting.

I assume you checked whether or not you actually need a visa, right? A silly question, I know, anyways…