Wednesday, December 7, 2011

Swiss ski resorts "must diversify to survive"

Simon Bradley from reports swiss winter resorts must improve the quality of their offer and focus more on niche markets like mid- and budget-range holidaymakers to remain competitive. These are the main conclusions of a Credit Suisse report that compares 31 Swiss winter resorts. Already plagued by the strong franc, Swiss resorts are also struggling with the lack of snow caused by unusually warm, dry weather.
According to the comparative study published on Tuesday, Swiss resorts face major challenges for their long-term survival. "We realise that the competition, especially Austria, has not slept on its laurels like Switzerland. They have cheaper offers which on the whole better meet the needs of modern tourism", Sara Carnazzi Weber, head of Credit Suisse’s economic research department for French-speaking Switzerland, told Between 1993 and 2011 the number of overnight stays increased by six per cent in Austrian resorts, compared with a 12 per cent drop in Swiss resorts to just under 13 million. Weber said the Swiss tourist industry, which contributes some five per cent to gross domestic product, had been penalised by the recent surge in the Swiss franc, which rose by more than 20 per cent against the euro earlier this year. Overnight stays from foreign visitors are forecast to drop by 4.2 per cent, according to the BAK Basel Economics research institute as tourists shun the Swiss Alps for cheaper destinations.
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But Weber pointed out that even when taking into account the recent exchange rate fluctuations, the prices in Swiss hotels and restaurants were on average 20 per cent higher than in France, Italy, Austria and Germany due to high personnel and product costs. To lure price-conscious skiers to the slopes and stop locals crossing the border, this season Swiss resorts have come up with an avalanche of promotional offers such as free lift passes, ten-per-cent-off holidays, discounted ski lessons and ski hire. Grächen in canton Valais is offering guests an exchange rate of SFr1.35 to the euro, compared with the current rate of SFr1.24. But cutting prices is not a viable option in the long run, said Weber. "In general Switzerland cannot compete with its neighbours on price so it has to focus on quality", she said.
While Swiss resorts were well positioned in the luxury, four- and five-star hotel segments where they enjoy an international reputation, they had much catching up to do in the mid- and budget segments, the authors stated. "Consumers who keep an eye on the prices are willing to make concessions on comfort but also want functional, clean and modern rooms and currently many cheaper Swiss hotels do not meet these criteria", they wrote. Those resorts targeting the middle classes should try to develop a clear niche, such as families or sport enthusiasts, and major investments are necessary, they continued. "In general there has been a rise in investments in new construction and transformations in the tourism sector in Switzerland after blockages after the 1990s", said Weber. "But they are mostly concentrated on big cities and less in Swiss resorts. Zermatt, for example, invests only SFr1,500 per bed which is much less than Zurich or Geneva". Veronique Kanel, spokeswoman for Switzerland Tourism, said she generally agreed with the report’s conclusions, "which support what we have been saying for some time, that is, focus on quality, cooperation between resorts and innovation". "Our big problem in Switzerland is the mid-range resorts which have not found their niche and don’t have sufficient resources to position themselves differently or invest in greater quality", she told
In the study Zermatt and St Moritz came out on top in terms of best overall winter offers and the highest demand from tourists. Davos, Verbier, Crans Montana, Celerina/Schlarigna and Gstaad were also ranked highly in terms of the activities and accommodation they offered winter holidaymakers. The resorts that generated the most demand included Gstaad, Engelberg, Grindelwald, Sils im Engadin and Villars/Gryon.

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