KOF Forecasts for Swiss Tourism: Recovery of Swiss Tourism Sector Continues

Continuous recovery of Swiss tourism

The recovery of the Swiss tourism industry continued in the last winter season. The positive economic trend abroad and the devaluation of the CHF against the EUR resulted in greater dynamics from abroad. Compared to the previous year’s season, the weather was also more favourable. The Alpine region benefited from early snow, while the growth trend continued in the city destinations. According to KOF estimates, overnight stays last winter exceeded the previous winter season by 4.6%.

Positive outlook for the coming summer season

Given Switzerland’s robust domestic demand, consistently positive impulses from long-distance markets and rising demand from the Eurozone, the prospects for Swiss tourism in the coming two years are clearly good. Hence, the recovery should continue. Thanks to the strong winter season, the number of overnight stays this year has already increased by 3.6% over the previous year. All regions are set to benefit from the broad-based recovery. While the Alpine regions continue to catch up, dynamics over the entire forecast period will be highest in the city destinations.

Stable domestic tourism demand

Following the last few years’ stable trend in domestic demand, tourism is expected to pick up dynamics in the coming years. This is due to the favourable economic situation and the sustained easing of tension on the labour market. In addition, the CHF’s devaluation against the EUR and the inflation differential between Switzerland and abroad have made the price of domestic destinations more attractive. In the coming years, the domestic tourism industry is therefore expected to derive greater benefits from the per capita growth in tourism services, while tourism spending abroad is set to rise slower than in the last few years.

Strong dynamics from abroad

In the coming years, tourism in Switzerland will derive its biggest impulses from abroad. Globally, tourism remains a growth industry. This trend is supported by the favourable global economic development. As before, the long-distance markets are expected to deliver the highest growth. As well as Asian countries, Switzerland is also likely to become more attractive for tourists from the Arab region. Travellers from big emerging markets such as Brazil and Russia are also expected to book more overnight stays in Switzerland. The recovery in the number of overnight stays by Eurozone visitors is likely to continue. However, growth in demand in Germany and France, which account for a significant share, is likely to be hesitant. The outlook for Italian and UK guests remains restrained.

Special analysis: exchange rate effect on overnight stays by region

Around 55 per cent of overnight stays in Swiss hotels are booked by visitors from abroad. In the course of the CHF’s upward revaluation, visiting Switzerland became more expensive for foreign guests. Do hotels and hospitality businesses in the different tourism regions experience the same impact of fluctuations in the exchange rate? According to the results of KOF’s special analysis, there are significant differences between city destinations, the Alpine region and the remaining tourist areas. Statistical analysis demonstrates that overnight stays in the Alpine tourist regions show the strongest response to fluctuations in the exchange rate. On average, a 1% upward revaluation of the CHF resulted in a close to 2% decline in the number of overnight stays. In the cities and the remaining tourist areas, the reaction is much less pronounced. This is most likely due to differences in the length of the visits, the reasons for the visits and the composition of visitors in the different tourist regions.