Swiss franc's rise freezes tourism

Geneva

THE Swiss Alps already looked pricey before the Swiss National Bank dropped its currency bombshell. Now, Swiss tourism fears being frozen out altogether.

As the central bank's shock decision on Thursday to scrap a cap on the Swiss franc pushed the currency up nearly 30 per cent, some businesses were already reporting cancellations as visitors rushed to rearrange their plans for the busy winter season.

Swiss hoteliers vented their fury on social media, and politicians urged the Swiss to support the country's tourism industry while resorts across the French border cheered a "Godsend" as they looked forward to new Swiss clients. "Swiss people! Take your holidays in Switzerland!" said Swiss tourist office chief Juerg Schmid on a Twitter account.

In Gstaad, hotelier Thomas Frei tweeted: "Great, first rejections, wanting to know the euro rate and whether we can do a better rate. While I'm at it, does anyone want to buy my hotel?"

Tourism contributes 3 per cent of Swiss gross domestic product (GDP), and hotels and restaurants employ 5 per cent of the labour force.

The franc's abrupt surge, which sent the Swiss stock market down 9 per cent on Thursday, comes weeks before European school half-term breaks which mark the height of the ski season, and a week ahead of the World Economic Forum, the annual meeting of the rich and powerful in the Swiss ski resort of Davos.

It is unlikely to dampen the spending of the many well-heeled attendees at Davos, although it will be noticeable. Anyone wanting to pick up a copy of The Economist magazine during their stay in Davos, for example, will find they have to part with 10 Swiss francs (S$15), 70 per cent more than in Germany where it sells for 5.80 euros (S$9).

The main worry of Swiss tourism officials is that a country already struggling with a reputation for being expensive will find it harder to attract visitors further down the scale, delaying a recovery in the sector. "The original forecasts predicting growth once again in the Swiss tourism industry over the next two years probably won't stand up any more," Christoph Juen, CEO of the Swiss hotel association hotelleriesuisse, told Reuters.

Tourists from Europe accounted for 37 per cent of overnight stays in 2013, according to latest data from the Swiss statistics office, but the country will be out of reach for many.

The price of a six-day ski pass in Verbier, a resort popular with Europeans, rose to 347 euros on Thursday, from 296 euros before the franc's surge. A cordon bleu schnitzel in Zurich's Zeughauskeller, a popular tourist hangout, costs an extra four euros at 27.9 euros and a beer is now 6.3 euros. Reuters

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