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End of boom but no bust for tourist industry

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Tourism in Switzerland reached the summit over the past 12 months with record visitor numbers, but is now being forced into descent by the global financial crisis.

Industry officials and analysts expect tourists to spend 2.4 per cent fewer nights in Swiss hotels this winter and an overall drop of three per cent for 2009.

Seen against the backdrop of the strong growth the industry experienced over the past five years, the decline is not dramatic, they said.

Visitor numbers peaked during the 12-month period ending last week with hotel bookings increasing by 4.5 per cent to generate a record 37 million overnight stays.

The industry was benefitting from a still robust global economy, a weak franc compared to the euro and excellent snow conditions in the Alps.

While the officials, speaking at a news conference in Zurich on Monday, were keen to put an optimistic spin on the inevitable downturn, uncertainty over the franc-euro exchange rate means the forecast must be taken with a large pinch of salt.

They admitted that it is the euro rate – not snow conditions or the quality of infrastructure – that is the single most influential factor determining peaks and valleys.

Due to the financial crisis, investors have sought out the Swiss franc as a safe haven, and it has been trading below the SFr1.50 mark against the euro recently – a level considered damaging to the key Swiss export sector, and the tourist industry.

More expensive

“Last year, the franc traded at SFr1.65 to the euro and it is now at SFr1.48, so a Swiss holiday has become 12 per cent more expensive, and we’re going to feel that,” Jürg Schmid, head of Switzerland’s marketing organisation, Switzerland Tourism, told swissinfo.

“We don’t really know what the euro-franc exchange rate will be in 12 months’ time. Our forecast is based on the assumption that the euro will recover next year,” said Richard Kämpf, head of the tourism department in the State Secretariat for Economic Affairs.

If it doesn’t, he warned, the “impact will be great”.

Hardest hit by the financial crisis will be Swiss cities which will see a drop in hotel bookings of nearly three per cent this winter as firms slash their travel budgets.

Resistant resorts

Officials say hotels in Switzerland’s alpine regions are more resistant to the financial crisis, doing three times as much business as the country’s biggest urban centres.

The decline in the alpine region will be just over two per cent and if snow conditions are good again, ski resorts should be able to count on the loyalty of their most important guest – the Swiss. They account for about 40 per cent of all nights spent in the country’s hotels.

Bruno Huggler of the tourism office in canton Valais, which counts the internationally known resorts Zermatt and Verbier, is convinced his region’s attributes will help it escape the crisis largely unscathed.

Valais is blessed with the highest ski areas in the Alps, which is usually translated into reliable snow conditions.

Snow

“People want to make sure they get good value for their money therefore they want to travel to places where they will find snow and excellent infrastructure, and because we can guarantee snow, they will choose resorts like we have in the Valais,” Huggler told swissinfo.

Switzerland Tourism says reservations for the important two-week holiday break at the end of the year are encouraging and it does not expect the consequences to be felt until the end of the winter season, with the full impact seen next summer.

Kämpf said Swiss tourists would help cushion the blow to the industry since consumer confidence in the country was high and unemployment levels were expected to remain low.

But if the franc stays strong, Swiss tourists tempted by cheaper holidays abroad could turn their backs on their own resorts.

Also cause for concern is the fact that the financial crisis will most likely stop the heady growth seen in tourist arrivals from emerging markets such as Russia, India and China.

swissinfo, Dale Bechtel in Zurich

A sample of predictions:

The domestic market in Switzerland will probably fare better than most as far as negative trends are concerned, followed by a decline in Asia, a clear weakening in the euro region, and a very severe decline in the USA and UK markets.

Switzerland is considered to be a premium product. Consumers will first opt for a more low-priced product before they stop consuming altogether. Therefore premium hotels will feel the effects more quickly.

The times of unrestrained, carefree consumption are about to be replaced by a more considerate “Zeitgeist”. While luxury will still be consumed, it will no longer be flaunted boundlessly, because this would be viewed as insensitive.

Source: Switzerland Tourism

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