October 31, 2011 / 11:15 AM / 7 years ago

Strong Swiss franc to hit hotel visits this winter

ZURICH (Reuters) - Hotel stays in Switzerland are expected to fall this winter as the strong Swiss franc and a darkening economic outlook take the shine off the country’s ski slopes, adding another blow to the struggling tourism sector after a poor summer.

The BAKBASEL economic research institute said on Monday it expected hotel stays to fall 2.6 percent this winter, with foreign skiers put off by the strength of the franc.

The Swiss National Bank has imposed a cap of 1.20 francs to the euro in September to try and shield the Alpine economy, but the tourism sector is still seeing fewer visitors.

“The current strength of the franc in combination with a slowdown in the pace of the worldwide economy is putting a strain on the tourism market,” it said in a statement prepared for the Swiss government.

Stays by overseas visitors are expected to drop 4.2 percent, with fewer tourists expected from Western Europe and the United States in particular, while demand from local residents is seen slipping 0.4 percent.

Switzerland has been grappling with the effects of the strong Swiss franc, which repeatedly hit records against the dollar and the euro earlier this year and flirted with parity against the European single currency in August.

This combined with poor weather led to a 2.5 percent fall in hotel stays over the summer, with Alpine regions the hardest hit, BAKBASEL said.

The institute expects hotel stays for the whole of 2012 to fall 1.9 percent, with a recovery not forecast until 2013.

“In 2013 the trough is likely to have been crossed and the Swiss tourism sector will return to a sustainable growth path,” BAKBASEL said.

In 2014 it forecasts hotel stays to rise 3.4 percent, benefiting from a rebound and investment in the hotel industry.

To help ease some of the effects of the strong currency, the Swiss government is proposing 870 million Swiss francs in aid to boost unemployment insurance and other steps, including support for the hotel sector.

Reporting by Caroline Copley; editing by Anna Willard

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