It's a paradox. The inexorable rise in the Swiss franc does not seem to be penalising the Swiss economy as a whole, and the hotel sector in particular. In one year, the Swiss franc has fallen from CHF 1.07 to the euro to CHF 0.98 on 6 October.. By the end of June, the Swiss franc had reached absolute parity with the euro. Since the beginning of July, its value has been above that of the euro, due to its status as a "safe haven currency". This situation could persist until at least the second half of 2023. according to foreign exchange specialists.
This could appear catastrophic for business travellers to Switzerland, with prices automatically rising due solely to the exchange rate. In reality, the picture is not so bleak. Both the Swiss National Bank and the country's major private financial institutions believe that the strong Swiss franc is actually helping to slow inflation.
Inflation contained by the strong Swiss franc
According to the SNB, in September it reached 3,5% since the start of the year, 2.1 points less than in France. And three times less than in the EU (10% according to Eurostat estimates). Crédit Suisse, one of the country's three major banks, states in its latest business report that inflation should even return to 2% in 2023 due to the strength of the currency.
The same trend can be seen in Swiss hotel prices. A spokesperson for the Hôtellerie Suisse association told AFP, the rise in the Swiss franc has enabled Swiss hoteliers to increase their prices to a lesser extent than in neighbouring countries. And that these small increases are largely offset by large increases in other countries. " For hoteliers, this means that they should even be more competitive than they are abroad." he told AFP.
Foreign demand for Switzerland back on track
The Swiss hotel industry is benefiting this year from the strong recovery in foreign tourism, after a catastrophic year in 2021. According to the Swiss Federal Statistical Office, the Swiss hotel industry recorded 9 million overnight stays by foreign visitors between January and July (+175.2% / +5.8 million). This is four times more than the total increase - domestic and international - in overnight stays (+45%).
Zurich once again exceeded one million foreign overnight stays - more than in the whole of 2021, Geneva recorded 0.8 million overnight staysBasel 0.37 millionLausanne 0.22 million and Bern 0.197 million. The balance between strong demand and supply is allowing prices to remain constant or increase slightly.
Admittedly, the Swiss hotel industry appears to be less sensitive to external economic factors and does not engage in price gouging. Nevertheless, it remains one of the most expensive in Europe. And that was long before the current crisis.
