By Goran Mijuk
ZURICH—The strong Swiss franc is keeping some tourists off the slopes in Switzerland this winter, prompting travel organizers to offer discount packages to win back skiers attracted to lower prices in the Austrian or French Alps.
The Swiss franc has soared to record highs during the euro-zone sovereign-debt crisis, which has underlined the Swiss market's status as a safe haven. In the process, foreigners looking at winter holidays here are suffering sticker shock.
"It has been a complete nightmare," said Mark Butler, a 30-year-old resident of Bristol, England, who, with his family of three, spent the New Year holiday in Klosters—Prince Charles' preferred ski resort—in the canton of Grison in eastern Switzerland.
"Ski passes, ski hiring and food have been extremely expensive," Mr. Butler said. "We paid some £150 [$234] for two people for a regular dinner in a normal restaurant. This would have bought me an exquisite dinner at a great London restaurant."
In response to the sky-high franc, tourists from Italy, France and the U.K., who in the past accounted for around half of foreign overnight stays in Switzerland, are choosing to stay at home, to ski elsewhere or to cut the length of their stay in the country.
The currency problem for the tourism industry, which generates between 3% and 4% of Swiss gross domestic product, is also hurting other sectors. Many exporters, such as the watch and machinery industry, are suffering from the strong franc, which risks curbing economic growth. But tourism is suffering most acutely at what is traditionally a crucial time of year.
Ernst Jaggi , director of Tourismus-Schweiz GmbH, which organizes travel in Switzerland, said overnight stays could drop 5% or more during the Christmas-New Year holiday period. Should the decline extend through the next two months, the tourism industry, which generates about 30 billion francs ($32 billion) in annual sales, could lose between 150 million and 500 million francs in revenue, affecting hotels, restaurants and shops.
In December 2009, Switzerland registered 555,800 arrivals from foreigners, who stayed for 2.5 days on average, according to the Swiss Federal Statistics Office. Including Swiss residents, hotel bookings that month topped 1 million, a roughly 2% rise over December 2008.
That feat is unlikely to be repeated for 2010, after the franc has risen more than 10% against major currencies over the past 12 months.
"The strong franc is a big problem, especially for the winter holiday season, which has always been expensive," said Simon Bickel of transport firm Jungfrau Bahnen Holding AG, which operates several mountain railways in the Swiss Alps.
Its Jungfrau railway is one of the country's top tourist destinations. The cogwheel railway climbs 4,550 feet through the Bernese Alps and takes passengers to an altitude of 11,225 feet to Europe's highest train station, offering views of the alpine landscape.
"Winter tourism is suffering, as tourists from emerging markets such as Asia don't come for skiing," Mr. Bickel said. Overnight stays of tourists from emerging markets during the winter season are growing fast, but still make up only a fraction of overall stays.
"We have started to develop travel packages for tourists in the U.K., Germany and elsewhere, offering to exchange the euro against the franc at favorable rates," Mr. Bickel added. Planned packages will include ski passes and hotel stays, and tourists can exchange the euro for 1.5 Swiss francs—a near-17% discount to the current level of around 1.25 francs, he said."We want to attract tourists even at the expense of margin erosions," Mr. Bickel said.
Tourists also are put off by high prices. According to Hotels.com's Hotel Price Index, Switzerland was the most expensive country in Europe for U.K. visitors in 2009, with the average price per room at £124—roughly double the level in the Czech Republic and Poland. On average, prices in Switzerland are 25% higher than in France and 44% above the level in Germany.
"I wasn't really aware about how the currency market developed over the past year. But the ski pass was more than 20% more expensive than in previous years. And food prices were also pretty high," said Ralf Gallinat, a social worker from Karlsruhe, Germany, who went snowboarding in Zermatt, a ski resort in the canton of Valais in western Switzerland, during the New Year holiday. "I was glad we stayed only for a few days."
Mr. Gallinat noted that the posh venue, which offers a postcard view of the Matterhorn, was well-frequented during the day but said the nightlife was on the stale side. "The New Year's Eve party in the hotel didn't draw too many people," he said.
Edith Zweifel of tourism company Zermatt Matterhorn said that while hotels in the region were fully booked during the New Year week, the strong franc had taken its toll. "We feel that many people spend less because of the strong Swiss franc. But we hope that the season will still develop well thanks to the good weather," she added.
While in the past few years weak snowfall hurt winter tourism, this year's early, heavy snowfalls attracted many one-day tourists from Switzerland, still the most important single tourist group.
"One-day tourists are certainly going to help," said Mr. Jaggi of Tourismus-Schweiz. "But, honestly, Switzerland needs to reconsider its price policy. Should the franc stay as high as it is now, we will certainly struggle. More price cuts are definitely needed."
Otherwise, both Swiss and foreign tourists may avoid Switzerland. A spokesman for Swiss travel agency Hotelplan said it has seen a "good rise in demand for Austrian ski holidays" this season. And German travel operator TUI /zigman2/quotes/206714402/delayed DE:TUI1 -3.75% AG said the strong franc is prompting more Germans to book winter holidays in Germany.
Travel operator travel.ch, which organizes travels for Swiss citizens abroad, says it sees how the recent currency swings influence travel patterns. "We see a huge upswing in demand for travel to European cities as the Swiss want to benefit from the strong franc. It's the other side of the coin of the franc rise."
Write to Goran Mijuk at firstname.lastname@example.org