KOF Tourism Forecast: pandemic reduces number of overnight stays by 13 million

2020 summer season: domestic guests supported tourism

Tourism has been hit hard by the coronavirus crisis. The winter season was abruptly interrupted and the summer season got off to a hesitant start. Since mid-June, however, tourism demand has bounced back. More Swiss citizens spent their summer vacations in their own country, with many of them belatedly taking holidays that had been cancelled in the spring. Demand during the summer months was therefore exceptionally strong. Nonetheless, domestic demand was unable to compensate for the absence of foreign tourists. The number of overnight stays by foreign guests fell by 40 per cent year on year. Whereas tourists from neighbouring and Benelux countries increasingly spent their holidays in Switzerland from June onwards, demand from other European countries remained subdued. Overseas tourists mainly stayed away owing to travel restrictions. In particular the Alpine regions, Ticino and areas outside the usual tourist hotspots managed to attract guests.

2020/2021 winter season: one-third fewer tourists from Europe

The recovery in foreign demand is being slowed by the rising numbers of infections and the associated quarantine restrictions. KOF is forecasting that the numbers of infections will remain high during the winter months and that travel restrictions within Europe will remain in place for the time being at least. The restrictions on overseas markets are expected to be gradually lifted in the spring of 2021. It is therefore assumed that guests from these markets will mainly continue to stay away this winter. Under this scenario the numbers of overnight stays by European tourists during the winter season will be around one-third lower year on year and roughly half of their pre-crisis levels. Domestic guests will continue to provide support for the tourism sector. The number of their overnight stays during the coming winter season is likely to be around 8 per cent above its pre-crisis level. The total number of overnight stays is forecast to fall by 30 per cent.

However, we cannot rule out the possibility that the pandemic will return in a much more severe form in the autumn and winter and will last longer than is currently assumed. Such a negative scenario would see a sharper fall in European demand and a significant dent in domestic demand during the winter months. Under this scenario the number of overnight stays is forecast to remain more than 50 per cent below its pre-crisis level during the coming winter season.

2020 tourism year: one-third of all overnight stays has been lost

The number of overnight stays during the 2020 tourism year as a whole is forecast to fall by 33.7 per cent year on year. Whereas the decline in domestic demand will be a relatively modest 14 per cent, the losses in international business will amount to a massive 50 per cent. Meanwhile, the number of overnight stays by overseas guests will plummet by more than 70 per cent. At the end of 2021 the total number of overnight stays by foreign guests will amount to just under 80 per cent of its pre-crisis level, and by the end of 2022 it will have reached 90 per cent of this level. It will not fully return to its pre-crisis level until the end of 2023.

It is estimated that a total of 13.3 million overnight stays will be lost in the 2020 tourism year as a result of the COVID-19 pandemic. This means that the hotel business will lose revenue of 1.6 billion Swiss francs during this tourism year. The revenue lost by the tourism sector as a whole over the same period will amount to more than 10 billion francs. Next year the loss of demand compared with the 2019 tourism year is likely to be 6.2 billion francs.

The prices of hotel accommodation, package holidays and air travel have fallen this year owing to the pandemic. They will not return to their pre-crisis levels until 2022. By contrast, prices in the hospitality sector have risen slightly. This increase has been consistent with the usual price rises of recent years. It therefore appears that price mark-ups owing to reduced capacity and discounts owing to lower demand are more or less balancing each other out.