Swiss tourism despite all crises with strong growth

According to the tourism forecasts published today by BAK Economics on behalf of the State Secretariat for Economic Affairs (SECO), demand for overnight stays in Switzerland will grow noticeably in summer 2022 (by around +2.3 million overnight stays compared with 2021).

Switzerland tourism forecasts @ BAK Economics – BFS

This is despite the fact that the consequences of the war of aggression in Ukraine are slowing down the recovery from the Covid 19 crisis. For the entire tourism year 2022, an increase of almost 7.3 million overnight stays is expected (+26.1%). However, longer-term effects, such as the restrictive Covid 19 policy in China or business travelers staying away for longer due to structural changes, mean that the pre-crisis level of overnight stays will not be reached until winter 2023/24.

Despite the Covid variant Omikron, overnight stays increased by more than 50 percent in winter 2021/22

The rapid recovery in tourism demand that emerged toward the end of summer 2021 was slowed over the first winter months by the Omikron virus variant. Nevertheless, tourism demand in Switzerland developed very well compared to winter 2020/21, with growth of 52 percent (+4.9 million overnight stays).1 The advanced vaccination coverage and the mostly mild disease progression of the Omikron variant led to less drastic restrictions than in the previous year. Switzerland also gained additional attractiveness compared to neighboring countries due to less restrictive corona measures. The strongest growth impulses came from the domestic market and from Europe, but despite this, only 86 percent of the pre-crisis level of demand for overnight stays was achieved in winter 2021/22.

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Negative global effects slow demand recovery in summer …

The current effects of the Ukraine war are slowing down the recovery of demand for overnight stays in summer 2022. The number of guests from Russia, for example, has fallen to almost zero since the start of the war.In addition, the already high global inflationary tendencies before the war have been further exacerbated by supply bottlenecks and a further marked rise in commodity prices, which is having a negative impact on consumer behavior. In combination with the generally high level of uncertainty resulting from geopolitical tensions, consumer confidence has declined significantly. Furthermore, growth impulses from the long-distance markets will be weakened this summer by high air fares caused by fuel and skill shortages. In addition, the absence of most visitors from China this summer due to the zero-covid strategy and the hesitant recovery of business tourism will slow down development.

… however, the catch-up effects of the Covid 19 pandemic clearly outweigh the downside effects.

Despite these obstacles, total overnight stays are expected to clearly increase (+13%) with a plus of 2.3 million overnight stays compared to summer 2021. The effect of the gradual removal of most travel restrictions and the resulting need of guests to catch up on missed vacations is greater than the impact of the newly created frictions. In particular, the guests from the long-distance markets, who until now have largely stayed away, will increasingly return to Switzerland, with an increase of 2.7 million overnight stays (+209%). The biggest boost to growth will come from the USA, with further positive impetus coming from European guests (+1.6 million overnight stays, +36%). The lion’s share of this growth will be contributed by guests from the United Kingdom, who will almost quadruple their overnight stays in summer 2022 compared to 2021. However, the regained opportunity to travel internationally will have a negative impact on the development of domestic demand, which will fall by around 2 million overnight stays (-16%) compared with the excellent summer of 2021.

Kulmhotel Gornergrat das höchstgelegene Hotel der Schweizer Alpen. Photo by Xavier von Erlach on Unsplash — Kulmhotel Gornergrat, the highest hotel in the Swiss Alps. Photo by Xavier von Erlach on Unsplash

Overnight stays will not return to pre-crisis levels until winter 2023/24

The increased demand for tourism among the Swiss will continue in 2023 and 2024, albeit on a reduced scale. Internationally, a continued but weakened form of the recovery observed to date can be expected in the coming years. In the tourism year 2023, a total increase of 3.3 million overnight stays is expected (+9.3%). However, the longer-term negative effects already mentioned above will prevent a return to the old growth path in the near future. BAK Economics therefore expects that the pre-crisis level of overnight stays will not be reached until winter 2023/24. In addition to the steady, general recovery in demand from long-distance markets, the gradual return of Chinese guests in particular, expected from summer 2023, will lead to the level of 2019 being exceeded for the first time.

Urban areas recovering less quickly

Urban areas were and are particularly hard hit by the Covid 19 crisis. Cities classically have a higher share of guests from European markets and especially long-distance markets. Some of their demand is recovering only hesitantly even beyond 2022.In addition, business tourism, which almost disappeared during the crisis, is particularly weighty in the cities. BAK Economics expects around 15 percent of business tourism to disappear permanently due to structural adjustments. Therefore, despite a clear recovery in leisure tourism in urban areas, the pre-crisis level of overnight stays is not expected to be reached until after 2024.