Top hotels face winter boom but summer gloom

The Dolder Grand reopened to a recession Keystone

Switzerland's most prestigious hotels are facing a rough ride from the economic crisis with the strong franc and declining corporate trade expected to dent profits.

However, the high end of the market is confident it can sweat out the tough times by falling back on a traditional image for top class hospitality and cashing in on the still buoyant winter season.

The umbrella group for the luxury hotel segment, Swiss Deluxe Hotels, said at a conference in Zurich on Thursday that bookings had reached record levels this winter.

But while the number of wealthy Russians visiting exclusive winter resorts such as St Moritz has not diminished, the 38 five-star hotels still expect a difficult year in 2009 with fewer guests and corporate events.

“The winter season is historically very good for Switzerland as we are very well positioned. But the summer could be a problem because of the complex and fast moving financial crisis,” Swiss Deluxe Hotels general manager Fiorenzo Fässler told swissinfo.

“This is more of a problem for hotels situated in towns because they have fewer repeat guests and they are faced with companies spending less for their conferences. Our corporate clients come from the banking, car and watch industries so we can also expect to be affected by economic events.”

Luxury shunned

Fässler added that the strengthening Swiss franc was also expected to hit guest numbers and profits next year.

“Britain is our third most important market and the United States the fourth, so a strong Swiss franc does not help us. The big challenge is to maintain the record numbers of guests from these countries that we have enjoyed over the last three years,” he said.

The recent fall in demand for luxury goods may also be an indicator that fewer people would be prepared to fork out for expensive hotels in future, according to Zurich Cantonal Bank analyst Patrik Schwendimann.

The global market for luxury watches, jewellery and fragrances has dropped by around five per cent in recent months, with the dip hitting Europe in October.

“Some wealthy people have lost money, but this could also be a state of mind,” Schwendimann told swissinfo. “Even if you still have lots of money, you might be more careful about holding onto it at the moment.”

Bad timing

The global economic downturn could not have come at a worse time for the newly rebuilt Dolder Grand hotel in Zurich. The exclusive hotel was shut for more than four years before unveiling its SFr440 million ($360 million) facelift in April.

Guest numbers have been disappointing since the Dolder reopened its doors, but managing director Thomas Schmid said the hotel was taking a longer term view.

“No company can suddenly spring back into the market within a year and we have always said that we needed three years. We certainly did not ask for a recession, but we are confident that we can handle it,” he told swissinfo.

“We expect next year to be more difficult than we previously foresaw and we have had to change our budgets.”

Schmid added that the hotel has an innovative strategy to help itself, and others, cope with the economic woes.

“We will focus on delivering a service and an emotional product that will make people forget about their money problems,” he said.

swissinfo, Matthew Allen in Zurich

Swiss luxury hotels

The Swiss hotel industry as a whole recorded a record 37 million overnight stays in the 12 months to the end of October – a 4.5% increase compared with the previous 12 month period.

But the industry expects a 3% fall in numbers of overnight stays in 2009.

Visitors spent a combined five million nights in Swiss hotels in 1934, the year that Swiss Deluxe Hotels was founded.

Celebrating its 75th anniversary next year, the group represents 38 of the most exclusive hotels in Switzerland.

These include the Dolder Grand in Zurich, the Grand Hotel Zermatterhof in Zermatt, the Grand Hotel Kronenhof in St Moritz, the Palace Lucerne, the Victoria-Jungrau Grand Hotel & Spa in Interlaken, the Gstaad Palace, the Bellevue Palace in Bern and the Beau Rivage in Geneva.

Hotels are judged every year on 1,500 quality criteria to allow them to stay within the organisation.