Strong franc gives tourism sector the chills

While the Swiss tourism industry is happy about recent dumps of snow, the strong franc and comparatively weak euro are a worry.

On Monday the euro fell to another record low against the franc of 1.2715 as investors, spooked by the euro crisis and tension between North and South Korea, moved into so-called safe-haven currencies such as the franc and the yen. Twelve months ago one euro cost SFr1.50.

As a result, staying in Switzerland is around 15 per cent more expensive for visitors from the eurozone than it was in December 2009, according to Switzerland Tourism.

The organisation’s Daniela Bär said she expected the number of overnight stays from the eurozone, notably Germany, to drop by four to five per cent on the same period last year.

She added that medium-range hotels would be most affected, since they were the target of most “spontaneous” trips. Also, hotels were not the only ones suffering: tourists were also thinking twice about eating out and making purchases.

But every coin – be it a euro or franc – has two sides, and the Swiss are currently enjoying paying 15 per cent less when they travel to the eurozone.

The effect is less marked for the British pound, which is currently trading at SFr1.50, 15 cents down on the year.