Hotels benefit from business boom

Zurich was an attracitve tourist destination this past Christmas Zurich tourism

Cities, not ski resorts, were Switzerland’s most popular destinations this winter. Latest statistics show that business travel is keeping the tourist industry afloat.

The publication of the number of nights tourists spend at Swiss hotels in the winter season (November to April) is always highly anticipated since tourism is a leading branch of the economy. In terms of income, it’s ranked ahead of the watch industry.

The hotel statistics are a key indicator of the health of the sector and are keenly analysed by myriad economists, tourism organisations and lobby groups.

This year, the reactions have been generally upbeat since there was only a 0.7 per cent drop in the number of nights tourists spent at Swiss hotels compared with the previous winter.

Upbeat because the industry expected a lot worse following the double whammy of a lack of snow at ski resorts and a strong Swiss franc.

In fact, a spokeswoman for the national marketing body, Switzerland Tourism, even went as far as putting a positive spin on the numbers, telling one Swiss newspaper that 2010/11 was the fifth-best winter season over the past 20 years.

But when looked at more closely, the franc effect and less-than-ideal winter conditions did encourage the Germans, British and French – the three largest groups of tourists after the Swiss themselves – to holiday elsewhere.

About seven per cent fewer Germans and British travelled to Switzerland this past winter compared with the year before, which resulted in a big drop in hotel bookings in mountain regions.

Mountain misery

Canton Graubünden, which includes the resorts of Davos, Laax and St Moritz, was hardest hit with a decrease of around six per cent. Canton Valais, which boasts well-known ski destinations such as Zermatt and Verbier, saw a 4.6 per cent fall, while the Bernese Oberland with Wengen and Gstaad lost 4.2 per cent.

Few skiers were booking hotel rooms in cities, but there were plenty of business people checking into hotels in Zurich, Bern and Geneva. These towns were the saviours of the winter season.

“If the economy is doing well, we see an increase in the cities, but in times of economic crisis it is also the cities that have problems. They respond more to the economic situation than currency issues,” Christian Hunziker, an analyst at BAK Basel Economics, told swissinfo.ch.

The greater Zurich area saw its numbers jump more than five per cent. Bern was hot on its heels with growth of 4.6 per cent while Geneva improved its bookings by three per cent.

Susanne Daxelhoffer of the Swiss Hotel Association agreed that business travel was less price sensitive than leisure tourism, adding that Swiss cities were benefiting from the current economic boom.

Swiss gross domestic product (GDP) grew in the first quarter of 2011 by 2.4 per cent compared with the same period of the previous year. It was largely led by a buoyant export sector which saw growth of 3.1 per cent compared with the fourth quarter of 2010.

City hotels have responded to the rising demand and higher customer expectations by investing in their infrastructure and services, according to Daxelhoffer.

Bigger city hotels

“The hotels are getting bigger, whereas the amount of beds has stayed the same. That’s a general trend,” she said, explaining that many establishments were trying to become all-in-one resorts to keep visitors spending money without leaving the grounds.

Julia Zogg from the Zurich tourist office told swissinfo.ch that one reason for Zurich’s excellent result was an expansion of its hotel capacity near the airport, which is “very attractive for the business traveller”.

But an increase in business travel alone does not explain how the Swiss tourist industry has kept its hotel bookings respectable.

The three cities mentioned, plus Basel, are responsible for just over 30 per cent of all bookings – even when the boosted 2010/11 winter numbers are taken into account. That’s compared with 43 per cent in the big three mountain regions (Graubünden, Valais, Bernese Oberland) where the overwhelming majority of visitors check in for pleasure, not work.

The answer lies in Asia, said Hunziker.

“The economies there are growing very fast so more and more people can afford to travel to Europe – and Switzerland. Switzerland is a very well-known destination in Asia, with a very good image. If more people can afford to travel to Europe, then more come to Switzerland.”

Making a difference

Of the approximately 16 million nights tourists spent in Swiss hotels this past winter, nearly 90 per cent were Swiss and European guests. However, Asian visitors are starting to make a difference, pushing ahead of tourists from the Americas.

For example, the number of Chinese coming to see Switzerland in winter – or do business here – doubled to 163,000 hotel nights. There was also strong growth from India (+22%) and the Gulf States (+15%).

According to Zogg, Asians prefer to use a Swiss city like Zurich as their base while making day trips into the mountains.

She added that her office had made a bigger effort this past year in promoting Christmas in Zurich and drawing Russians to the city during the Russian New Year.

Indeed, the Russian market proved to be one of the few bright lights on the European horizon. Russian visitors spent 292,000 nights in Swiss hotels – an increase of nearly 11 per cent.

Leisure vs business travel

The Swiss tourist industry does not break down the number of nights stayed in hotels by type of travel, whether business or pleasure, group or individual.

However, the rise in bookings in cities which have a wide selection of business hotels and conference centres is a strong indication of growth in business travel.

A few mountain resorts also see a lot of conferences and meetings. They include Davos, home to the annual meeting of the World Economic Forum (WEF), and Interlaken.

Winter season statistics

The number of hotel bookings has remained stable over the past five years.

According to the Federal Statistics Office, visitors spent 15.2 million nights at Swiss hotels between November 2005 and April 2006.

The figure peaked at 16.8 million in 2007/08 before dropping and staying at around 15.8 million the past three winters.

The six-month “summer” season sees approximately the same number of bookings.