For 24 years, Urs Eberhard has marketed Switzerland to the world. He now finds the traditional markets he’s worked hard to build crumbling before his eyes as Europe deals with a mountain of debt. But, tough as the Matterhorn, Eberhard hikes up to explore new peaks. He talks to Raini Hamdi about the role of NTOs in distressing times
Executive vice president-markets & meetings
How badly is the eurozone debt crisis affecting the Swiss tourism industry?
We’ve lost quite a substantial number of overnights, thereby quite a substantial amount of income from the whole euro market – Germany, Holland, Belgium, Italy, France, the UK, etc.
In the last five years, we lost almost 20 per cent from Germany, 30 per cent from the UK; in absolute figures that translates to millions of overnights and millions of Swiss francs lost.
How many millions?
In total, from the traditional markets, looking back five years, we lost nearly half a billion Swiss francs, about CHF470 million (US$482 million), in income.
On the other hand, we are gaining an enormous amount of new visitors from markets like China, India, South-east Asia, (South) Korea, Australia, Russia and also markets in eastern Europe, the Baltics, Nordic countries, etc. Through the increase, we made an extra of over CHF300 million in the last five years.
If there wasn’t the debt crisis, could you have accommodated such increases from the new markets?
Yes. The yearly average occupancy of Swiss hotels is less than 50 per cent. Of course, during summer vacation, Christmas, New Year, Luzern is full, but hotels in the back valleys are not full. Or the winter resorts aren’t full in summer, while the summer resorts are not full in winter, so if you average it all out, it works out to less than 50 per cent occupancy on an annual basis.
But the issue is, the new markets go to only 10 to 20 per cent of the destinations in the country – certain icons or must-sees like Luzern and Interlaken – so the growth is concentrated on only a few hotspots, while the loss from the traditional markets is spread throughout since these markets have been coming to Switzerland for the last 100-150 years and visit all places throughout the year. Therefore, our strategy, as a national tourist office, is really to diversify and spread the growth of the new markets.
But this is not so easily achieved. If you travel to Paris, you want to see the Eiffel Tower. As a first-time traveller to Switzerland, you’d want to see Luzern, the Jungfrau, and we must understand that. But we need to encourage second-time travellers from new markets, or those who seek a deeper or mono-European tour, to go to new routes.
This is why we’re really trying to give new itineraries and ideas to tour operators and ground operators, so they feature both the hotspots and creative themes, say, honeymoons, multi-generation travel, soft adventure, snow and ski, train travel. By doing this, we hope people will spend two or three nights in Switzerland.
Is the length of stay so short – only a night?
Yes, as you know, once a market opens to overseas travel, it’s always the series groups after business travel and official visits, and these first-time travellers want to see eight countries in 10 days.
It’s the same when the Americans, English, Russians started travelling. And for the first-time series, it’s always the hotspots first that they want to see, London, Paris, Venice, Luzern – in the old days, it’s called the grand tour and heaven forbid we change that.
But once they start to return, that’s when we must make sure the tour operator is offering something different. That’s why we are working with them to create new ideas, like the best of Switzerland, discover Switzerland as a mono-destination, or instead of eight European countries, why not just three nights in Italy, Switzerland and France and explore them deeper. And we show them how and what they can do.
Are you still seeing growth from Asia, despite signs of the Chinese and Indian economies slowing?
Asia is still growing – and on an extremely successful 2011. In the first six months, China grew 24 per cent, South-east Asia 15 per cent, Australia almost 10 per cent, India, Japan, South Korea 10 per cent each. There are warning signs – India’s going to be a bit difficult we understand. The Olympics in London, from what we hear, kept Asians away due to tight flight capacity and higher pricing. So we’re expecting that July and August results might be weaker.
You’ve been marketing Switzerland since 1998 and helped shape the product and the markets for it throughout those 24 years. You must have encountered crises. How are these times different?
If I look back on such a long time, the industry is cyclical indeed. The difference is, the crisis we have today has never been so widespread; it touches the whole of Europe in such a dramatic way.
The most dramatic crisis I could think of was when I was based in the UK. In 1993/1994, it was really deep in the oil crisis and hurt the market terribly. We had to counter the situation when we lost 50 per cent of the business. We had to see what could we do to bring back the Brits to Switzerland, and we started to explore, as we do now in Asia, new opportunities where we had a competitive advantage.
We started with the young snowboarders of the UK; we organised a snowboard championship in Covent Garden, which attracted 100,000 spectators and lots of TV coverage and, all of a sudden, we were able to change the image of Switzerland as being this old, traditional destination for old people into a fun, young, new destination.
We were so lucky as there was a lot of snow in Switzerland, the UK economy went up again, and this was the turning point. From then on, the market went up again for the next 10 years and we more than doubled the number of UK visitors from 2008 with not just the old demand, but the new demand from the younger travellers.
There’s always something good in adversities, isn’t there?
Yes, you become more creative, you don’t take things for granted, you can’t allow yourself to be lazy and wait like a fat cat in front of a mouse hole. You have to get up and find the mouse holes.
But the difference with this crisis, as you said, is it’s so widespread. Does that make you a nervous cat despite having gone through the UK crisis?
It makes us very nervous. It does worry us tremendously because there is not a lot you can do. You cannot make the country 30 per cent cheaper and they will come. As the French saying goes, ‘you cannot make a donkey drink when he’s not thirsty’.
What we’ve realised is that all the new customers in the traditional markets – i.e., the customers who desired to go to Switzerland once – have dropped out because of the poor economic situation. The ones that are still coming are the loyal customers who know the product, know they get a lot of value from being in Switzerland and feel at ease in the country. Our strategy is to work on that loyal base and cut back efforts a little bit on targeting new customers. If we do target new customers, we go about it in a focused way.
In the UK, for instance, we work with the Royal Horticultural Society. They have 350,000 members; they all love gardens. So we go to them and say hey we have beautiful alpine gardens, islands like Brissago with beautiful gardens, and if you are interested in receiving more information, we will send you some Edelweiss seeds. The interest we got was incredible. We then built an alpine garden at the Hampton flower show, worked with tour operators on introducing special garden tours and invited a few media members to write about these tours, so once again it’s a very integrated approach and very focused.
So niche marketing is the way to go now.
At the moment, you have to go niche. If we do the big ads in the paper saying ‘Switzerland is beautiful, come to Switzerland’, it will not work because the donkey is not thirsty. But if we go to the niche, where the donkey is thirsty for a special beverage, we have a chance he will drink.
Is that the biggest challenge for NTOs such as yourself?
The challenge for NTOs is that the industry is looking at you to promote the whole country, but the customer does not want a whole-country sell. He wants specific recommendations that suit his needs from a neutral, trustworthy source. So we’re caught between the expectations of the industry and expectations of the client.
Both are our customers, but it’s a fine line to fulfil the demands of the industry and still give the end-consumer a decent answer, especially now, when the industry has become more accountable for its spending and has become impatient to see results (60 per cent of Switzerland Tourism’s funding is from the government, 40 per cent from the industry). This impatience may result in industry partners going their own way (in marketing) and we may lose the strong umbrella approach we now have, which I’m absolutely convinced is the most effective approach.
Also, a lot of our partners are financed by the number of visitors they get and fewer visitors mean less spending.
What keeps you going?
The product keeps me going. I would not have the same emotional ties if I were to sell a machine! And I’m fortunate to sell a country like Switzerland.
The whole travel industry is also a people business and I can look back to all my postings and all the friends I’ve make – it’s a sense that you’ve left a footprint in the markets with your work.
What are you proudest of to date?
The turnaround in the UK is something I’m very proud of.
I also find it most rewarding that we are able to bring most of the partners under one umbrella to promote Switzerland as a country and not have split groups doing their own things, which will dilute the message. The Swiss government, too, trusts us and has been giving us more funding each four-year period in the last 12 years, even for 2012-2015, despite the difficult times we’re in.
This article was first published in TTG Asia, August 24, 2012, on page 8. To read more, please view our digital edition or click here to subscribe.