Financial crisis chills holiday mood at ultra-rich Swiss ski resort. Russian tourists are making cancellations everyday, and the reason they give is the financial crisis.
At the suite-only Carlton Hotel, which charges up to US$6,800 ($10,000) per room during the winter peak season, the reservations department is getting disturbing news daily.
The hotel's general manager, Mr Christopher Cox, said: 'We are getting Russian cancellations every day and they are telling us that the financial crisis is the main reason.' In St Moritz, where one in every four hotels is five-star and where pop stars, princes and presidents count among regular skiers, tourism industry players admit that the global economic slowdown is chilling demand. The trend corresponds with findings from a recent study commissioned by Italy's luxury goods producers' association indicating that even the wealthiest consumers, once thought to be immune to economic slowdowns, are cutting back on spending.
Mr Cox said the dropped rooms at the Carlton are being snapped up by others on waiting list, but he admitted that 'extra revenues', such as those from food and beverage and luxury boutiques, are expected to slide. He said: 'Guests who used to order two pizzas with a bottle of wine that cost 8,000 Swiss francs ($10,200) may not do that this year. I think most people will still come on holiday, but I don't think we will get the same amount of extra revenues.'
Russians make up the biggest group of customers by nationality and account for three in 10 of the hotel's guests during the winter ski season. They are among the most lavish spenders.
However, a slew of bad economic news has dampened consumer sentiment in Russia. Since posting record highs in May, the two main stock markets in Russia had lost about three-quarters of their value, slipping on a plunge in oil prices and financial turmoil.
Not just the Russians, but Americans and British - the two other main tourist groups here - also appear to be tightening their belts. Mr Dieter Bonner, a member of the board at Engadin St Moritz, which runs area ski lifts and mountain trains, said he had also heard of cancellations at other hotels, adding that 'there are Americans who aren't coming because of the crisis'.
But he remained optimistic about the winter holiday season, saying that this 'can be an opportunity' for St Moritz to attract more local consumers.
Crisis spending
Mr Bonner said: 'In a crisis, people tend to stay in their country. This could be a chance for us to get our local tourists to rediscover Switzerland.' He was, however, concerned about the effect of the Swiss franc, which last week hit a historic high against the Euro. Compared to a year ago, the franc has gained about 11.6 per cent. 'The strong franc could be a bigger handicap than the crisis,' he said, as it could drive Swiss consumers to spend in neighbouring France, Germany or Italy instead.
Mr Eugen Arpagaus, who heads the tourism and economic bureau of canton Graubuenden where St Moritz is located, agreed that the sudden currency swing could have a negative impact on consumption here. He estimated that a 15 to 20 per cent gain in the franc could translate to a fall of about 5 per cent in overnight stays. But for Mr Arpagaus, the main worry is the length of the crisis. He said: 'What worries me more is how long this crisis will last. People will still go on vacations for now, but if the crisis goes on for three years or five years, then we could really see an impact.'
The chief executive officer of Graubuenden Tourism, Mr Gaudenz Thoma, had the same prognosis, saying the effect of the crisis would most likely show up only in the summer.
He said: 'The cancellations now could help us overcome the problem of overbooking. I don't think we would suffer tremendously in winter, because we are strong in winter. But if the crisis lasts, it could really hit us in the summer.'
---edited from the New Paper_November
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