Hotelleriesuisse - the main Swiss hotel association - has urged its members to concentrate on quality in 2007, its 125th anniversary.
At a news conference in Bern on Tuesday, the association laid out its plans for 2007 also calling for measures to tackle Switzerland's high prices, which it said hold back tourism.
"We could do much better if people allowed us to," said Guglielmo Brentel, Hotelleriesuisse's director, on Tuesday.
The association accounts for 80 per cent of overnight stays in Switzerland and its more than 3,200 members range from luxury hotels to family inns.
In growth terms, Swiss tourism remained behind the global average due to "the worst basic conditions when it comes to costs", caused by excessive regulations, isolation and protectionism. The association is therefore demanding more deregulation and liberalisation.
But after the downturn in the hotel sector in the 1990s, there are signs that things are finally starting to look up. In 2006 the number of overnight stays increased by six per cent and the number of foreign guests also rose sharply as a result of a favourable exchange rate.
"The reasons are above all linked to the good general progress in the world economy and the strong value of the euro," Brentel told swissinfo before the media conference.
"Although we have not yet recuperated all that we lost during the difficult years, we are now responding decisively better to our clients' demands."
Growth has been particularly positive in the big cities which have responded to commercial tourism, Brentel said. But mountain tourism regions, such as the Italian-speaking canton of Ticino, canton Graubünden in the east and the French-speaking Valais, still remain in difficulty.
Brentel believes that it is the mid-range hotels – three to four stars – that are likely to suffer the most, explaining that part of the problem is that Switzerland is an expensive country, which takes its toll on members and means there is not much money left in the pot for investments.
But he believes that more can be done within the industry to increase its competitiveness.
This involves increasing professionalism and innovation, adapting marketing to the needs of the market and a liberalisation of the framework conditions, he said.
"We don't make the best use of [our] potential – we have a good product but we don't manage and sell it as we should."
Brentel says the Swiss hotel sector does have some advantages over its neighbours, such as a huge diversity of foreign tourists. This allows the sector to increase its operations and seasons: summer and winter. Switzerland also enjoys a good mix of urban and mountain tourism.
This year the association is placing emphasis on a pioneering spirit and innovation. It wants its members to focus on services and look to the future.
As part of this it is encouraging its industry quality label, which aims to check and increase quality among its members as well as raise awareness.
"I am convinced that Switzerland needs to follow the road towards quality to be successful. Quality doesn't come on its own – it has to be managed," Brentel said.
Hotelleriesuisse has asked the Gottlieb Duttweiler Institute, a think tank, to carry out a study into how the sector is likely to look in 2020.
Brentel is optimistic. "I think that by focusing on our country's authenticity, tranquillity and security, as well as our natural beauty, we can't go wrong."
Hotelleriesuisse was founded in 1882 in the Swiss capital, Bern.
Members: 3,255, of which 2,240 are hotels and 415 restaurants.
5-star hotels: around 18
3- to 4-star hotels: around 1,400
Hotelleriesuisse accounts for about 80% of overnight stays in Switzerland.
Tourism in Switzerland
Swiss tourism has its origins in the 19th century and flourished until the First World War. It then suffered a downturn due to the economic crisis and the Second World War.
The sector recovered during the post-war era, as Switzerland did not suffer any war damage. The boom lasted until the end of the 1980s. After a difficult 1990s, the sector is seeing an upturn.
The Swiss tourism industry generations around SFr22.8 billion ($18.2 billion) a year, around 5.1 per cent of gross national product. More than half comes from foreign tourists.
According to Hotelleriesuisse, the hotel sector's turnover is around SFr8.6 billion a year, with 33 million overnight stays annually.
Tourism in Switzerland employs 250,000 people.