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Hotels and restaurants nurse economic hangover

The sun isn't shining for Switzerland's hotel and restaurant owners Keystone

Swiss hotels and restaurants say business has failed to pick up despite an improved outlook for the economy as a whole.

This content was published on November 3, 2004 - 16:28

Turnover from July to September was on average three per cent down on the same period last year.

Gastrosuisse, the restaurant and hotel owners’ association, warned on Wednesday that 10,000 of the country’s 30,000 establishments were surplus to requirements.

“The turnover generated by these businesses is not enough to cover their costs,” said the organisation.

According to Gastrosuisse’s own accounting service, around 60 per cent of hotels and restaurants are posting negative results.

During the third quarter, four out of ten establishments reported an increase in turnover, but a similar number saw sales slide.

Just under a third of businesses said profits were up, while 40 per cent complained that profits were shrinking.

Pessimists

Managers said they didn’t expect the situation to improve much in the coming months, with around a third predicting a further drop in turnover.

“The sector is undergoing considerable change,” said Klaus Künzli, president of Gastrosuisse. “With consumers keeping a tight grip on their wallets, we shouldn’t expect much improvement for our business.”

Restaurant turnover fell by 3.4 per cent from July to September. Hotels saw a slight increase in overnight stays by Swiss and foreign customers, but earnings were still down 2.5 per cent on last year.

“The drop in turnover was especially noticeable among three- to five-star hotels,” said Künzli. Only those in the lower categories managed to increase sales.

French-speaking Switzerland was particularly affected by the downturn. Restaurants saw turnover dip by 4.6 per cent, while hotels slipped 8.2 per cent.

Tax contribution

To help its members, Gastrosuisse has asked the authorities to lower the amount of value-added tax it pays to the state every year.

According to the association, the hotel and restaurant sector is one of the biggest fiscal contributors, paying SFr800 million ($669 million) to the government.

“Our share of taxable income in Switzerland is only equivalent to 3.2 per cent, but we pay out 11.2 per cent of all taxes,” added Künzli.

Gastrosuisse said it would lobby parliamentarians to get tax legislation changed.

The association also wants to attract more customers to hotels and restaurants owned by its members. It is preparing a new classification system for Swiss hotels, aimed at making them easier to identify.

Gastrosuisse says only 1,000-1,200 establishments are currently classified, out of a possible 5,000.

swissinfo with agencies

Key facts

Gastrosuisse represents two-thirds of Switzerland's hotels and restaurants, or around 20,000 establishments.
Approximately 215,000 people work in the sector.
Hotels and restaurants generate SFr22 billion in turnover, SFr7 billion more than the building industry.

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