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Switzerland struggles through bleak tourism season

Weak economy and war make visitors wary

LUCERNE, Switzerland — Switzerland enjoyed its hottest summer on record but, far from basking in the sun, the vacation industry is in a downright wintry mood.

Economic gloom dampened the famed wanderlust of the Germans. Asia has recovered from the SARS epidemic, but the international tourism business is still sneezing from its aftereffects. And the fear of flying prompted by the Iraq war and terrorist attacks has combined with the weak dollar to reduce American tourists to a trickle.

"The start of the season was dreadful. There were no Americans and no Asians. It was sad, very sad," comments Lucerne tourist guide Monika Achermann. "Now it's beginning to pick up again, but only slowly."

The sense of gloom hangs heavy over Lucerne — the Swiss tourist industry's epicenter, which has invested and expanded in recent years in hopes of attracting more package tourists and convention visitors and which, more than any other resort, is feeling the crunch.

The central Swiss city is blessed with amazing Alpine and lake scenery and has kept its medieval heart intact alongside stylish new architecture. It has a population of some 65,000, but hosts an average 1 million overnight stays — half of them by Americans and Asians — in dwellings ranging from luxurious lakefront hotels to a converted prison.

Despite the attractions, the city has experienced a 36 percent decrease in Japanese visitors to Switzerland in the first six months of the year and 16 percent decline in Americans. In a sign of the times, even the top-notch Palace Hotel offered last-minute bargains — albeit at the hefty price of $219 for a double room.

Lee and Joan James from San Diego, Calif., were booked for a visit last spring to famed Swiss tourist attractions like the Matterhorn, Gstaad and St. Moritz, but it was canceled due to lack of demand so they were offered a summer tour instead. Even so, there were still plenty of empty seats on the bus.

The couple — who delayed travel after the World Trade Center attacks — say they are glad they went ahead with their European tour.

"Switzerland is like a storybook land. There's never a moment without a view," said Joan James.

"But, boy, is it expensive," they exclaimed in unison. Dinner for two at a standard local restaurant can easily cost nearly $60 — about a third more than it would have been two years ago, when the dollar was strong.

Zermatt is also feeling the pinch.

"Usually a lot of Americans come to Zermatt at this time of year," said marketing director Daniel Luggen. "But this year we have a decrease of one-third."

The resort suffered a blow in mid-July when the main route up the Matterhorn was closed for a couple of days after rockfalls trapped more than 80 climbers. Guides remain jittery that the exceptional heat is melting the permafrost and making the ascent of Switzerland's most famous peak more dangerous.

"It's a chaotic year," says Sammy Salm, tourist director of Grindelwald, a resort particularly loved by Americans and Japanese that lies between the central Swiss resort of Interlaken and Europe's highest railway station, the Jungfraujoch.

"We hope to restore some sort of balance by next spring — as long as there is no new major international crisis," he says, adding hopefully that Grindelwald, with its network of small family hotels, will bounce back.

Swiss Tourism director Juerg Schmid is not so sure. He predicts that 1,000 of the current 5,700 hotels will close over the next 10 years — about the same number as have disappeared over the past 10 years. Nearly two-thirds of Switzerland's hotels are family-run and have fewer than 20 rooms — far too small to survive cutthroat international competition unless they merge or join a pool devoted to special interest visitors like cyclists, he argues.

Schmid is also fretting about the future of Swiss International Airlines. The Swiss flag flier is in the midst of a prolonged survival struggle and announced in July that it was axing one quarter of its destinations — meaning there will be fewer direct flights to the Alpine country.

Foreign visitors to Switzerland, with its population of just 7 million, last year spent $8.9 billion, down 3.5 percent on the bumper year of 2001. This year is expected to be even worse. Overall, tourism — including spending by Swiss people — has contributed about $21.9 billion — to state coffers annually in recent years and is one of the most important pillars of the economy.

As a consolation to the tourism industry, at least the Swiss are staying true to their homeland. After all, why travel to the Mediterranean or North Africa when temperatures at home have regularly soared into the 80s since the end of May in the hottest, driest summer on record?

The tourist office reported a surge in late bookings, not least among people seeking refuge in Alpine heights from the heat stifling much of Europe.

Leslie King, an engineer from London, is a regular visitor.

"We love lakes and mountains and we like the fact that its all so clean and everything runs on time," he says, gazing at the gleaming blue waters of Lake Lucerne. "We'll keep coming back."