(Bloomberg) -- In the Bernese Oberland town of Interlaken, the Balmers hostel is out to prove a holiday in Switzerland isn’t synonymous with eye-watering prices. For just 5 francs ($5), guests can spend the night in a colorful hammock in an old barn.
The tactic -- in addition to the shared sleeping space, guests have access to facilities like showers, wireless Internet, the garden and a ping-pong table -- seems to be working. It may also be indicative of a turnaround for the tourism sector -- long beleaguered by an overvalued franc.
“It didn’t even take two days, and they were all booked,” hostel manager Jan Marti said of the offer -- available during the summer in the town near the iconic Eiger, Moench and Jungfrau peaks. “It was clear we’d not make a big profit on this, but it was about the message: Switzerland doesn’t have to be expensive.”
With the franc steady against the euro this year, things might finally be looking up for hotels and restaurants in Switzerland, which just celebrated its Aug. 1 national holiday. With some of Europeans’ favorite vacation destinations beset by violence and political unrest, holidays in a country renowned for its safety and neutrality may become more attractive.
“Although it’s expensive I was keen to see the breathtaking scenery,” said Lee Hanbyeol, a 26-year-old student from South Korea who had just arrived from Paris at Zurich’s main train station. As for security concerns, “I didn’t worry about Switzerland but I did worry about France,” she said.
The number of guests arriving to stay overnight in a hotel rose 0.9 percent between January and May compared with a year earlier, official statistics show. Among guests from the U.K. and the U.S., the increase was 5.4 percent and 6.5 percent respectively, while among Swiss it was 2.6 percent.
Those statistics appear to bear out a forecast by the KOF economic research institute, which -- citing the economic recovery in Europe and a “stable exchange rate” -- predicted a rise of 1.4 percent in hotel guests’ overnight stays this summer.
The Swiss economy appears to be finding its footing again after a rocky 2015, when the central bank’s policy switch caused the franc to appreciate sharply against the euro, undermining growth. Although the Swiss currency is little changed versus where it was at the start of 2016, it’s still 20 percent stronger than in it was in 2010.
In the upmarket resort of Zermatt, the main street is crowded with guests, according to Edith Zweifel, a spokeswoman for the local tourism board.
“I’m hearing only good things from our hoteliers at the moment, they’re seeing good bookings,” she said.
The Matterhorn towers over Zermatt, and publicity in 2015 for the 150-year anniversary of the scaling of the mountain may still be propping up interest, with vacationers also wary of foreign travel. Germany, bordering Switzerland to the north, was rattled by four attacks -- including a deadly shooting spree in Munich -- last month.
“Our big media presence last year -- and all the terrible events that have occurred -- may be a factor,” Zweifel said. But “we don’t do marketing on the back of others’ misfortune.”
For a look at how Spain and Portugal are faring, click here.
Yet not all have good news to report, with high prices still a deterrent for some. Online reservation portal Holidaycheck, which caters to tourists in German-speaking countries, says first-half bookings for Switzerland were down 50 percent year-over-year.
“Switzerland is difficult due to the exchange-rate situation,” said Stefan Schimanski, director of sales at Holidaycheck. “Going out to eat in a Swiss restaurant, you a pay a lot more than in Austria, for example.”
To make matters worse, the attacks in France and Belgium have frightened off tourists from Asia, a key target for Switzerland. Visitors from China or India often travel in groups, with fixed itineraries across several countries. For the January to May period, visitors from Mainland China arriving to stay in a Swiss hotel plummeted an annual 15.3 percent.
That means Swiss tourism’s hoped-for revival may not be there just yet.
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