The International Tourism in Switzerland Conference, hosted by EHL Hospitality Business School on November 22, 2024, addressed the significant decline in Switzerland's ranking as a tourist destination—from 5th in 1950 to 28th in 2022. The conference aimed to understand the reasons behind this change, explore future evolutions and develop strategies to influence this trend. Various tourism stakeholders, including policymakers, industry experts and academics, gathered to discuss the current state of international tourism in Switzerland. The discussions covered a wide range of topics, from tourism policies and digital transformation to the impact of COVID-19 on cities and sustainability initiatives.
Rebekka Rufer from the State Secretariat for Economic Affairs (SECO) provided an in-depth overview of Switzerland's tourism policy. The strategy focuses on collaboration and coordination with different tourism stakeholders to enhance the framework conditions for tourism in Switzerland. SECO organizes annual conferences to discuss future topics concerning tourism and promotes entrepreneurship to help tourism businesses adapt to their environment. Digital transformation is a key aspect of their policy, with SECO supporting the national database infrastructure project to capitalize on digitalization. This initiative aims to help stakeholders manage their businesses better and enhance their tourism offerings and market presence.
SECO employs four main funding instruments to promote tourism in Switzerland: Innotour, which funds innovative tourism projects; the Swiss Association for Hotel Credit, which provides low-interest loans; Switzerland Tourism, the national marketing organization; and the New Regional Policy, which supports projects like mountain railways and bike trails. Innotour promotes innovation, cooperation, and knowledge creation by covering over 50% of project costs, while project sponsors retain financing and management responsibilities.
The Swiss Association for Hotel Credit is responsible for executing the Federal Act on the Promotion of the Hotel Industry, providing loans with low interest rates. Switzerland Tourism focuses on markets with significant potential and aims to balance promotion and management to ensure the right visitors are at the right place at the right time, reducing bottlenecks. The New Regional Policy allows for investment in infrastructure projects that enhance tourism offerings. SECO has identified balanced/over-tourism, digitalization and climate change as key topics for future consideration.
Dr. Demen Meier Christine from HEG-FR provided a comprehensive historical overview of tourism in Switzerland. In the 1950s, Switzerland was a leading tourist destination due to its untouched status post-World War II, luxury services, and well-developed infrastructure. The country's landscapes, accommodations and outdoor activities made it a prominent destination. Luxury hotels played a crucial role in driving innovation, and Swiss culture, including museums and historical sites, attracted many visitors. The country's well-maintained trains and roads enhanced its accessibility, and services were differentiated based on quality and customization rather than price.
From the 1970s to the 1990s, the development of airlines and transportation facilitated access to Switzerland, especially for mountain tourism. Major resorts like Zermatt, Saint-Moritz and Crans-Montana developed, and international events such as world ski championships and international festivals in Montreux, Lucerne and Nyon further boosted tourism. Luxury tourism remained an important driver during this period.
However, the 2000s brought challenges such as competition from new destinations offering more competitive prices, standardization and a lack of innovation. The strong Swiss franc reduced the purchasing power of foreign visitors and international tragedies like terrorist attacks changed consumer choices. Increased competition from countries like Austria, Spain, France and Italy, which offered cheaper yet similar services, posed challenges. The 2008 financial crisis, the rise of China, the September 11th terrorist attacks and the COVID-19 pandemic also had an impact.
Consumer preferences shifted towards local experiences, ecotourism and shorter stays. The decline in skiing tourism due to climate change, competition from other resorts and slow digital innovation further affected Switzerland's attractiveness. Despite these challenges, Switzerland's core strengths (magnificent landscapes, quality infrastructure, service personalization and safety) remain relevant. Integrating innovations and digitalization is crucial for making Swiss tourism offers attractive and exceptional.
Mr. Thomas Allemann of HotellerieSuisse reviewed the development of the Swiss hotel industry over the past 25 years. Since 1973, there has been a significant decline in the number of hotels, but the average hotel size has doubled and the number of guest beds has remained stable. The industry faced numerous crises, including economic downturns, the SARS outbreak, the 9/11 attacks and the Swiss franc shock. Undeterred by these challenges, the industry recorded 41.75 million overnight stays in 2023, surpassing the 40-million mark for the first time.
There has been a shift from holiday regions to urban areas, with cities like Zurich, Basel, Bern, Lausanne, Geneva and Lugano experiencing growth in overnight stays. This growth is driven by domestic demand and has led to an increase in supply, primarily from chain hotels. Based on data from the Federal Office of Statistics, major cities have been able to slightly increase the occupancy rate thanks to higher demand, despite a massive increase in supply.
However, even with the higher occupancy rates, prices are under pressure due to the increase in supply when inflation is also taken into account. In mountain regions, occupancy rates have risen regardless of a decrease in the number of hotels and beds. The Average Daily Rate (ADR) was under pressure until 2019, but there has been an increase since the COVID-19 crisis. In holiday regions, the 5-star category has seen an increase in ADR in spite of lower occupancy rates.
Domestic demand has been a key growth driver since 2000, especially in major cities. There has been a continuous decline in foreign demand in holiday regions, particularly from Germany. The Swiss population has increased by around 2 million, from 8 million to almost 10 million inhabitants. Holiday regions have only been able to benefit from this growth since the COVID-19 pandemic. International demand suffered mainly from the decline in foreign demand, especially from European countries, particularly Germany. Germans had more than 6.5 million overnight stays in the last 20 years, but now that figure is approximately 4 million. This shows that Switzerland will have more Americans tourists than Germans.
Simon Flury of BAK Economics Basel discussed post-pandemic shifts in tourism demand, using econometric models and AI-based tools for both short-term and long-term forecasts. Switzerland showed significant growth in overnight stays by domestic guests compared to international guests in 2023. This trend is expected to continue, with domestic overnight stays increasing more than the population and employment growth rate. European markets have largely returned to pre-pandemic trends, with domestic tourism booming in countries like Germany, France, Italy, Poland and the Netherlands.
Long-haul markets have seen notable shifts in travel behavior, particularly in Asia. Chinese tourists' overnight stays in Switzerland increased steadily from 2005 to 2019 but were affected by the COVID-19 pandemic. Although these markets are recovering, new competition from within Asia is emerging. The pandemic enabled Asia to develop its tourism sector, and recent agreements within Southeast Asia have made it easier to travel within the region. Thus, the number of foreign overnight stays from Asian tourists is expected to decrease. Overall, tourism in Switzerland has largely returned to pre-pandemic patterns, with a persistent trend towards domestic tourism.
Prof. Urs Wagenseil of HSLU emphasized the importance of sustainability in tourism, highlighting the need for tourism to contribute to the United Nations' 17 Sustainable Development Goals (SDGs) by 2030. Sustainability is a key factor in destination competitiveness, encompassing natural and cultural resources, economic environment, infrastructure, service standards, policy and governance, market demand, innovation and technology, and accessibility. It is logical that if a country focuses on preserving natural resources or builds up a good international reputation, it can gain a competitive advantage.
The Swisstainable program, launched in 2021, aims to make Switzerland the most sustainable travel destination in the world under the slogan "Get Natural." Over 2,700 partners have engaged in the program, with varying levels of certification. However, some partners are involved for marketing reasons rather than genuine sustainable development.
The program's success depends on a commitment to sustainability rather than merely chasing certification. The Global Sustainable Tourism Council (GSTC) established 50 years ago provides criteria and standards for sustainable tourism. The Swisstainable program aligns with these standards, aiming to enhance Switzerland's sustainability credentials.
Adrien Genier of Geneva Tourism discussed how cities like Geneva navigate long-run challenges in international tourism. The COVID-19 pandemic significantly impacted Geneva Tourism's budget, but the organization used this opportunity to reshape its business. Geneva has seen a resurgence in tourism, increasing room occupancy rates despite new hotels opening. Business travelers account for over 60% of overnight stays in Geneva, but many companies have reduced their travel budgets.
Geneva Tourism integrates sustainability into its operations and bidding processes to attract more business conventions. For example, bidding to host a convention entails an application with about 70 pages, with six pages dedicated to the destination's sustainability endeavors. Destinations that cannot answer these questions favorably are automatically removed from the pool.
Strengthening the city's brand, ensuring convenience for tourists, and attracting investments are crucial for navigating long-term challenges. Cities function like resorts, eliminating the need to pack and unpack frequently, and are designed for easy access and exit. Private investors primarily focus on Geneva's travel and tourism sector, viewing hotel investments as stable real estate.
Based on the presentations and audience at the conference, the future outlook for Switzerland's tourism industry involves encouraging sustainable initiatives and being mindful of progression rates to avoid stagnation. A commitment to sustainability is essential, and authorities need to push in that direction. Strategic investments and leveraging Switzerland's strengths in quality, innovation, and sustainability are key to future success.
The tourism industry is projected to grow by around 5.8% annually until 2032, potentially doubling the volume of travel by 2050. This growth will primarily occur in cities, leading to major investments in transport and accommodation. Alpine destinations must reinvent themselves to remain attractive year-round. Hotels should focus on extending guests' length of stay and be prepared for future crises.
Switzerland's tourism industry faces challenges but can leverage its historical strengths and embrace innovation and sustainability to remain competitive. The Swisstainable program and strategic investments are vital for achieving long-term success and maintaining Switzerland's appeal as a top tourist destination. The conference highlighted the importance of collaboration, digital transformation and sustainability in shaping the future of tourism in Switzerland. By addressing these key areas, Switzerland can continue to attract tourists and maintain its reputation as a high-quality destination.