Ski resorts grapple with strong franc

Cheaper prices and plenty of snow have ensured that rental properties are full in Champéry for the time being swissinfo.ch

Swiss ski resorts are introducing incentives to make Switzerland a more affordable destination in the face of cheaper offers from abroad.

The strong franc has been highlighted as a major concern by the Swiss tourism industry this winter, with fears it will drive customers away to less expensive destinations.

In Champéry, 1,000 metres above sea level, it’s a seemingly quiet day. The resort’s main car park is mostly empty mid-morning, perhaps because locals haven’t made the short drive up from the Rhône valley, deterred by the clouds masking the nearby summits and the rain.

The cable car is running but there is nobody queuing to head up the mountain towards the Portes du Soleil ski domain that straddles the border between Switzerland and France. 

Walking around the village though, many cars are parked outside the chalets and apartment buildings that dot the hillside, most of them with Swiss number plates. An impression confirmed by Eric Liechti, director of the local tourist office.

“A lot of people made last-minute bookings this year,” he told swissinfo.ch. “They were waiting to see if there would be any snow before deciding to come.”

After fears the winter season would be facing another drought, heavy snowfall ensured Christmas and New Year were successful in alpine resorts.

But with the strong franc and potentially cheaper destinations just over the border, snow alone won’t convince customers to turn up. According to Liechti, lift prices were cut five per cent this season and tickets cost the same whether they were purchased in Switzerland or France.

Other businesses have also made a financial effort to keep customers happy. One property agent told swissinfo.ch that rental prices were slashed 25 per cent, a cut that has convinced many clients to holiday in Champéry.

Sales, he added, have not dropped off in the property market either, although prices have not increased and purchasers tend to be Swiss rather than foreign residents.

Slashing accommodation

In the Jungfrau region, where outside visitors have long been a vital cog in the local economy, the strong franc seems to have had a slight effect on stays from the eurozone. The tourism sector is betting on special packages to attract customers.

“We are offering for example an extra night’s stay along with an extra day’s skiing to clients,” said Andrea Hess of Jungfrau Region Marketing. “British tour operators also have special packages for their customers that substantially cut the cost of ski passes.”

According to Hess, fewer Europeans are also staying in the area, while tourists from other markets have increased, a trend that began a few years ago. Generally speaking, people are also spending less than before.

But slashing the price of accommodation is not officially on the cards.

“Price dumping is not effective and sends out the wrong message,” Hess told swissinfo.ch. “Swiss products cost more but are of better quality.”

In Champéry, clothing and sports stores have also adapted to the strong franc. Shops have posted signs announcing a euro bonus, offering discounts of up to 20 per cent off regular prices, while other posters call on Swiss residents to buy local.

For Charly Matthieu, owner of a sports shop on the main street, the cost of skis has been kept down this year for example.

“We managed to bring down prices thanks to agreements between ski makers, middlemen and shop owners,” he said. “Thanks to that we have been able to maintain sales and the locals who make up the vast majority of our clientele are still coming back.”

He added that the rental business, which relies mostly on foreigners, has not fallen off either.

Downsizing

What everyone is trying to avoid is a repeat of the last winter season, where a lack of snowfall kept people away even if the ski runs remained open thanks to the use of artificial snow cannons.

Some  restaurant owners reckon their takings for last year could be down ten to 20 per cent over 2010, despite events such as the mountain bike world championships being held last summer in Champéry.

For Kina Mitchell, who has run a restaurant with her husband in the resort since 1999, last season was the worst she has experienced so far. But even before that, the franc was having an impact on business.

“People have had less money to spend on an evening out, so rather than see them turn away because of prices, we’ve adapted what’s on offer,” she told swissinfo.ch.

“Rather than provide exclusive products, we chose to use simpler ingredients in the kitchen for example. We have also downsized so we can cut down on fixed costs,” she added.

Survival of fittest

In Wengen, one of the Jungfrau region’s most famous resorts, some hotels are proposing guaranteed exchange rates to attract their clientele, offering  SFr1.40 per €1, well above banking rates. 

Marion Prevost, president of the Wengen hotel association, says it is hard to say if it is the strong franc or the global financial crisis that has affected numbers.

“Until the end of July, business was good,” she told swissinfo.ch. “The effects of the downturn are being felt now.” 

Prevost isn’t sure that special packages will help business either, and is concerned bigger, better rated hotels dropping prices will harm the smaller players in the tourism market.

“Small hotels such as mine can’t afford to drop 35 per cent on the price of a room,” she said. “We don’t have the flexibility and the financial strength of the bigger establishments to cut deals.”

She remains optimistic though that the season will pick up, even if people spend less time and money on a ski holiday. “Sunshine and snow are more important than currency any time,” she added.

And in Champéry, everyone agrees. “If people, especially the media, say there is a lack of snow, that does more damage than anything like the strong franc,” said Liechti.

Miles of slopes

There are 164 medium and large ski areas in Switzerland. But in total, the country has 650 mountain transport and ski lift companies. They provide access to 12,000km of ski slopes.

With 11,000 employees, the companies are a key economic factor in mountain regions.

They have a combined annual turnover of approximately SFr840 million ($885 million).