Key Management Challenges / Lodging and Cableway

Key Management Challenges – SW / Lodging and Cableways

By Evelyn Zaugg, Jonathan Wicht and Seghen Zeremariam

 

Introduction

The Tourism Industry in Switzerland has grown over the years, mainly thanks to its Alps, its sufficient snowfalls and the beautiful natural landscapes.

 

The Alpine environment, where most of the stakeholders in Tourism settled and developed their businesses, is nowadays threatened by several dangers such as pollution, global warming, increase of tourist flux (mass tourism) and other pressures from environmental and human activities.

 

Because of these threads, the stakeholders are challenged to develop solutions in order for them to keep up with the increasing demand in leisure activities and behave in a sustainable manner.

 

Lodging:

Actual trends:

Increased demand for:

–          Value accommodations

–          Second homes

–          Higher class accommodations

–          Specialized and personalized hospitality (hotels golf)

 

Stagnant demand for:

–          Traditional hotels

–          Mid-range accommodations

 

Reduced demand for:

-small hotels

 

The problem for Switzerland is that now the biggest part of the hotels is small hotels and traditional hotels and as we could see for the actual trends, it is not the kind of hotels that attract tourists nowadays. And also they want higher class accommodation.

 

During the last 30 years, the number of hotels decreased but despite this number of room and number of beds by hotels increased. This is a good development but is is not sufficient. The bigger problem is that the number of small hotels is too important in the Swiss hotel industry. Another problem is that hotels in Switzerland are generaly less well equipped than similar categories hotel in other countries but at a higer cost because of the lack of modernisation.

 

To explain that, on the international plan, it is generally estimated that a hotel is profitable from 100 beds. In 1992 in Switzerland the average number of beds in hotels was 42 and in 2009 it went up to 50 beds with around two beds per room. As we can see we are far from the 100 beds essential for the profitability.

 

 Image

 

Funding:

 

Another problem for the hotels, investors prefer to inject money on big hotel projects than in middle-range hotels.

 

The modernization of the hotels is also a problem that hotels managers must handle. Lots of hotels have not invested much money to modernize their hotels and equipment, they preferred reinvest their benefice in the exploitation of the hotel instead of investing in renovation and modernization.

 

The small-scale hotels are a problem for the Swiss hotel industry because many owners instead of giving up an establishment which is not profitable anymore prefer to let the quality and the prices decrease year by year. These methods damage the hotel sector and put pressure on the general level of price of hotels.

 

In these conditions, it is a good thing for the hotel industry in Switzerland when the number of hotels decreases because it is usually the one or two stars hotels category that is concerned, that means small hotels with low profitability.

 

Marketing:

 

Another problem is that only 13% of the hotels in Switzerland have a brand name or a label. This lack is a problem for the hotel industry. Investors are reluctant to invest money to modernize the rooms, furniture and buildings if the hotel is not related to a global selling system or customer’s loyalty policy.

 

Cableways

The Alps have been the selling point of Switzerland’s successful tourist industry for more than a century. Without tourists, many Alpine areas would not be economically viable. In some places over 80 per cent of jobs depend on them. The Alpine area as a whole receives 100 million visitors every year. The influx of tourists puts the mountain areas under enormous pressure. In the winter tourists come to ski expecting to find snow. However, in recent years snow has been less dependable, which spells economic disaster, especially for lower-level resorts.

 

But the shrinking of glaciers isn’t the only problem of Swiss ski resorts. As for today, the ski resorts that can ensure at least 100 days of skiing are located at an altitude of at least 1200 meters above sea level, which represents 85 % of Swiss ski resorts. However, according to the Swiss National Science Foundation, by 2050, only those located at a minimal altitude of 1500 meters above sea level will be able to provide at least 100 days of skiing, the equivalent of 63 % of the ski resorts.

 

One controversial answer has been to use artificial snow cannons. These machines use huge amounts of water. They need about 800 tonnes to cover an area of 2.5 acres with snow eight inches deep. Water is taken from reservoirs and streams, at a time of year when the water is running low. This water is effectively dumped elsewhere, harming both soil and plants. The cannons also consume huge amounts of energy, and, to make matters worse, artificial snow quickly forms a hard surface and needs frequent fresh snow to keep the pistes usable. The proportion of pistes with cannons available is more than five times what it was in 1990.

 

Man-made snow is used on about 10 per cent of Switzerland’s slopes, while the average in Austria, Switzerland’s main competitor, is about 30 per cent. The town of Arosa is an exception. It already covers about 20 per cent of its ski area with artificial snow. The Arosa cable car company wants to double this in the near future.

 

The consequences for cableway businesses are that they often have to relocate their installations. For example, in canton Obwalden, the masts of the ski lifts on the Titlis Glacier have to be relocated up to four times a year. Knowing that the base of the ski lifts is anchored into the permafrost, they also are subject to landslides and movement.

 

Figure 1 : One of the cableways in Titlis, Obwalden

 

One other major problem is the seasonality. In general the seasonality should be a supplementary source of revenue for the cableway industry nevertheless it is a big challenge to estimate how many facilities are needed according to the yearlong average frequency rate. Visitors in fact want to do more than just ski and snowboard. They demand a varied offer of adventure and alternative activities which specially should be offered in summer time. All these issues appeal for more investments and more risk taking. Furthermore to stay competitive, cableways must invest all the time, especially in security, renovation and improvement.

 

Tourism in Switzerland: Marketing

In 1917, in order to encourage the tourism industry in Switzerland, the National Swiss Tourism Office (ONST) was created and, since 1995, is known as Swiss Tourism (ST). It is an independent company, which role is to promote the tourism in Switzerland, but primarily abroad. Its mission is to encourage the potential customers to visit the country. Not only to they have their headquarters in Zürich, they also opened over the years in 28 countries no less than 35 offices. Swiss Tourism is the creator of the internet platform www.myswitzerland.com and is responsible for creating advertisements and any other promotion campaigns. Its yearly average budget is of about 76 million francs, funded by the Confederation, the regional tourism organisations and by private investors.

Despite having a small budget, they still manage to innovate and create visible advertisements. So, how could small businesses increase their visibility? The solution for them is to reunite with other stakeholders in the same area and collaborate, instead of competing.

 

Tourism in Switzerland: Politics

Another important association is the Swiss Tourism Federation (STF), which role is to protect the stakeholders’ interests towards the political environment, the authorities concerned and the public. In other words, its main mission is lobbying, since 1932. It has, at the moment, over 80 members and is the largest group in the Federal Assembly (Bern).

The STF encourages the increase of quality and innovation in the tourism industry, it helps uniform the labelling of businesses and increases the possibilities of networking among its 600 members and other actors of tourism in Switzerland.

The STF also provides training programs, aimed to improve the skills of people wanting to work in the tourism industry. It also encourages the benchmarking process.

 

Sources

http://www.geocases2.co.uk/printable/Pressure%20on%20the%20Swiss%20Alps.pdf

http://www.wttc.org/research/economic-data-search-tool/

http://www.bfs.admin.ch/bfs/portal/fr/index/themen/10/02/blank/key/02.html

http://www.swissinfo.ch/fre/economie/Crise:_la_Suisse_touristique_drague_ses_voisins.html?cid=541606

http://www.swissinfo.ch/fre/economie/Entre_fausse_croissance_et_vraie_stagnation.html?cid=32648622

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