Tourism industry challenges budget cuts

Switzerland is increasingly attractive for Asian tourists Keystone

There are dark clouds on the horizon for the Swiss tourism industry even though the country as a tourist destination is more popular than it has been for many years.

The government is threatening to cut the budget of the national marketing body, which is already tangled in a restructuring dispute and faced with a massive loss of revenues due to climate change.

The cabinet has called on parliament to approve a budget for the next four years of SFr186 million ($152 million) for Switzerland Tourism.

On Wednesday however, industry officials said this amounted to a de facto cut in the national tourist office’s budget when inflation is taken into account. It demanded SFr195 million for the 2008-2011 period.

“The increase of hotel occupancy rates by 5.8 per cent in 2006 and the prominent increase in visitor numbers during the current fiscal period shows that investment promotes growth in the industry,” said Switzerland Tourism director, Jürg Schmid.

In fact, the industry has already revised down its growth forecast for this year to 1.1 per cent, before results are published of what is expected to be a poor winter season.

The unseasonably warm weather has meant that many of the country’s 230 ski resorts have only been able to open sporadically if at all. And while resort hotels have reported few cancellations, there has been a significant drop in sales of day ski passes.

Bern University presented a study on Monday focusing on mountain resorts in the Bernese Alps, predicting a decrease in winter revenues due to rising temperatures of around 30 per cent.

Fatal consequences

That is expected to be fatal for many mountain lift and railway companies which generate up to 80 or 90 per cent of their turnover in the short ski season.

The author of the report said the loss could only be partially compensated by investing more in marketing campaigns to promote the summer season.

Schmid admitted that this would lead to a “concentration process”, causing many companies to go bankrupt.

“There will be many resorts and villages that may not be able to stay in the winter business, so there will be winners and losers,” he told swissinfo.

A key to the rise in visitor numbers last year has been Switzerland Tourism’s success at marketing the country in the four corners of the world.

Broad base

Unlike neighbouring Austria which is largely dependent on German tourists, Switzerland has a broad visitor base.

Last year, British (highest figure since 1970), Americans, Russians, Indians and Chinese travelled to the country in near record numbers. Since these nationalities tend to travel in the spring, summer or autumn, they can help the industry compensate for the winter decline.

However, Franz Steinegger, president of the Swiss Tourism Federation, said if parliament toed the government line, it would be difficult to sell the country in emerging markets.

“We have new markets in Asia for example, and we should have [more of] a presence there, so we need more money,” he told swissinfo.

The tourist officials also lamented the fact that infighting had postponed a plan to merge Switzerland Tourism with two other state-run promotional bodies. They said the merger would have assured badly needed government funding for the industry.

swissinfo, Dale Bechtel

In brief

A study by St Gallen University commissioned by Switzerland Tourism found that every franc invested in the tourist industry generate high returns.

The SFr46 million the marketing organisation receives annually from the state generates SFr2.26 billion in turnover, and SFr318 million flows directly back to the government in the form of tax revenues.

2006 figures

5.8% more overnight stays compared with 2005 (34,848,426)

There was an above average increase by tourists from:

Britain (8.8%)
United States (11%)
Russia (18.7%)
Golf States (15.6%)
India (14.2%)
China (19.5%)