Winter tourism tipped to feel the chill

Fewer people are expected in Swiss ski resorts this season swiss-image.ch

Winter tourist resorts are expected to feel the pinch of the increasingly strong franc this year, despite a huge rise in Asian visitors in the summer.

Record numbers of tourists from China and India, who propped up the hotel industry in the summer, are forecast to stay away during the winter freeze. As a result, overnight stays are forecast to drop by 1.5 per cent from last year.

Research group BAK Basel Economics has predicted a 2.2 per cent decline in overseas visitors between November 2010 and April 2011. The number of overnight stays by Swiss holidaymakers is tipped to drop by 0.5 per cent.

The biggest problem weighing on the tourism industry is the high value of the franc, which has climbed some 12 per cent against the euro since the beginning of the year. This has already been reflected in a drop in German, French and Italian visitors in the summer.

However, the Swiss tourism sector has proved remarkably resilient so far this year, with overnight stays between January and September up 2.1 per cent from 2009.

Chinese guests rose by more than three-quarters in the summer months, with Indian visitors up by a quarter, tourists from Japan growing by a sixth and ten per cent more holidaymakers from the United States.

Religious boost

The sudden influx from these regions took everyone by surprise, not least BAK Basel, which had predicted significant falls in overnight stays.

But the boost is not expected to last, according to BAK Basel tourism expert Christian Hunziker. He believes the surge of US guests this year was driven by a highly popular religious festival in the southern German town of Oberammergau that takes place once a decade.

“This is a one-off effect that will not be felt this winter or next summer,” Hunziker told swissinfo.ch.

Furthermore, Asian and Middle Eastern visitors are not so keen on winter sports, preferring to visit Switzerland during the warmer months.

“These markets are not so strong in the winter and they will therefore not be able to stabilise the falling demand caused by the weak euro,” he added.

Cost cutting?

In fact, BAK Basel does not even expect so many Asian visitors next summer as the prognosis for the global economy is for bleaker times than this year. Hotels can expect one per cent fewer visitors in 2011, with a pick-up in fortunes not forecast until 2012.

The Swiss tourism industry generates three per cent of total annual economic output and employs 4.2 per cent of its workforce. Earlier this year, the Swiss authorities responded to the threat to this precious industry by promising to reorganise tourist boards and extend the mandate of the tourism think tank Innotour for another five years.

There have also been calls for Swiss hotels, which are marketed as top end products with a commensurate price tag, to reduce the price of overnight stays.

However, Christoph Juen of the Swiss Hotel Association warned that it would be a mistake to reduce the quality of a premium product along with costs. Juen said he was disturbed by evidence of some hotels reducing prices in the race to capture a larger slice of the growing Asian market.

“These guests like to spend money on watches and other Swiss products, but not so keen to pay a high rate for hotels,” he told swissinfo.ch at a Swiss Tourism presentation in Zurich on Tuesday. “We must not begin to distort the market with price dumping.”

“Must see”

Juen even confessed to being nervous about the massive increase in tourists from China and India.

“I would prefer a slower growth rate and to keep the rack rate [full published price] of hotels,” he said. “In the last couple of years there has been a certain enthusiasm in entering these markets. We must not grow too quickly, but have a sustainable growth.”

One advantage that Switzerland has in the Asian market is that it is on the list of “must see” destinations on a European tour.

Switzerland is often packaged together with France and Italy by Asian tour operators with an all-inclusive price of transport and accommodation for all three countries. This hides the fact that the strong franc makes Switzerland a more expensive country to visit.

Switzerland is set to remain on the packaged tours for some time to come, Juen believes. “It is very expensive for a tour operator to find another destination and new accommodation,” he said. “So as long as the packages sell, Switzerland will remain on the list.”

Swiss tourism

Despite the soaring franc, overnight stays in Swiss hotels increased 2.1% in the first eight months of 2010 compared with the same period last year.

The summer months of May to August saw a 3.2% increase in overnight stays. This follows a 0.5% hike for the 2009/2010 winter season as the Swiss tourism sector rode out the global economic recession in reasonable health.

This summer some 5,789,751 overnight stays were filled by Swiss guests (+1.9%) with the US accounting for 700,157 (+10.2%), Japan 331,850 (+15.8%), India 244,033 (+24.5%) and China 171,096 (+78.4%).

The main destination driver of growth was the cities, with 6% more overnight stays. Mountain resorts saw an increase of just 1.2% with other rural spots recording a 3.2% rise.

However, the good times are expected to end this winter. BAK Basel predicts a 1.5% fall in overnight stays compared with the last winter season – which was the second best on record.

With the global economy expected to slow down next year, BAK forecasts a 1% fall in overnight stays during the summer season.

A recovery is expected in 2012 (+1.7%) with the growth tipped to expand in 2013 (+2.8%).