Cash-strapped Swiss plan to revive tourism

Choppy times ahead? Posing in front of the Rhine Falls in Neuhausen, canton Schaffhausen Keystone

A plan to breathe new life into the flagging tourism sector has been welcomed as a necessary development, but the government scheme is facing funding hurdles.

This content was published on July 1, 2010 minutes

The industry, which contributes three per cent of total Swiss economic output and employs 4.2 per cent of the workforce, is facing tough times with overnight stays and tourist spending falling away last year.

Overnight stays in Swiss hotels fell by nearly five per cent last year as the economic crisis and the strengthening franc kicked in. Foreign visitors that did come to Switzerland were also tighter with their wallets, spending 3.8 per cent less than in the bumper year of 2008.

Economic research group BAK Basel predicts worse to come, with a forecast 0.7 per cent drop in overnight stays this summer – five per cent from the eurozone – followed by a further 0.4 per cent drop next year. Tourism will not recover until 2012, BAK predicts.

Since the BAK report issued in May, the euro has fallen even further against the franc, making it yet more expensive to visit Switzerland from most European countries.

The State Secretariat for Economic Affairs (Seco) responded last week by issuing proposals to bring the various tourism bodies closer together into a more integrated cluster group. It also plans to extend the mandate of the tourism think tank, Innotour, for another five years.

The idea is to get government agencies, tourist boards, academics and the private sector working closer together so that they collectively have more impact on the sector. Switzerland Tourism said it was “extremely pleased” with the plan.

Funding concerns

The idea has merits, according to Christian Laesser, a professor of tourism and service management at St Gallen University.

“Tourism is a classical network industry that needs to collaborate to reach the right scale potential,” he told “It is extremely difficult to make your ideas work in the market if you are too small and act alone.”

He added: “Some countries even have tourism ministers so this is a step in the right direction.”

The new strategy, which would cover the period between 2012 and 2015, must pass through a consultative stage before reaching parliament next January.

One of the biggest hurdles to its implementation will be funding. The tourism sector was awarded an extra SFr12 million ($11.3 million) last year as part of a series of economic stimulus packages.

But the new strategy plan comes with prickly financial strings attached. The life of think tank Innotour may be extended, but its annual SFr5 million handout may have to be raided from the SFr47 million budget of the Swiss tourist board rather than the previous arrangement of Seco separate funding.

As a result largely of government spending cutbacks, revitalising the Swiss tourism industry would have to be carried out with less cash, according to the Seco plan.

Innovation required

Not everyone is happy with this idea. Christoph Darbellay, leader of the centre-right Christian Democratic Party, launched a parliamentary motion earlier this year demanding more funding for the beleaguered tourism industry.

Funding would help put ideas into action and the Swiss tourism industry is not without those, either in the public or private sector. A recent report by Innotour praised many recent innovations, such as the annual marathon around the Jungfrau mountain.

The Swiss tourist board is also tackling the problems of the strong franc by offering deals at a fixed price in euros to counter fluctuations in exchange rates. The government business development agency Osec has for years been supporting Swiss tourism with special events in foreign countries.

But above all, according to Christian Laesser, Switzerland must work to reduce its dependency on the European market. “Swiss tourism must become more internationalised and become less dependent on the eurozone,” he said.

“Switzerland actually has an opportunity, as eurozone countries become fat on increased local tourism, to start grazing the Asian market and gain a competitive edge.”

Matthew Allen,

BAK Basel tourism report

With the Swiss tourism industry facing pressures from the global recession and the strengthening franc, the economic research group BAK Basel published a report in May.

BAK predicts the tourism industry faces tough times ahead, but also sees hope at the end of the tunnel in 2012. However, the Swiss franc has gained against the euro in the meantime.

BAK believes overnight hotel stays will shrink by 0.7% this summer. The worst fall will be from Europe (5%), but visitors from the US are expected to boost numbers.

In 2011, the forecast is for a drop in overnight stays by 0.4%, although BAK predicts a 1.8% positive rebound in 2012.

Cities are less likely to feel the short-term negative impact, with large conglomerations still experiencing a 1.1% rise in overnight stays this year.

The alps of central Switzerland are also expected to do well despite the ongoing problems. But other well-known tourist destinations, such as Tessin, Valais and Graubünden, will not fare so well, according to BAK.

These predictions were made on the back of a forecast exchange rate of SFr1.44 to the euro for this year, 2011 and 2012.

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