GENEVA - When Will Southwell, owner of Chalet Bergheim in Zermatt, checked his e-mail last Thursday, he found the Swiss ski resort had reacted quickly to the central bank's decision to scrap its currency cap with the euro.
As the Swiss franc strengthened some 20 per cent against the euro and the pound, Zermatt's tourist office suggested four options to the hotels, chalets, restaurants and cable-car firms that comprise its 1,100 members: reinstate the 1.20 franc per euro cap for European visitors; offer discounts of 20 per cent; cut prices by 10 per cent; or take no action.
"I'm considering holding our prices in euros for a while," said Southwell, who works for a consultancy in Zurich and rents out his century-old wooden chalet overlooking the Matterhorn for as much as 7,600 francs a week during peak season. "The bank's move was a huge shock and impacts everyone."
Zermatt, based in the canton of Valais in the southwest of Switzerland and voted the Alps' best resort last year in a survey of 48,000 skiers by mountain-management.com and the University of Innsbruck, isn't used to offering cut-price holidays to lure visitors to its 360 kilometers of pistes that climb as high as 3,883 metres. While that altitude provides a cushion against this season's mild winter, the Swiss National Bank's surprise decision compounds the woes that came after the ruble's decline deterred some Russian visitors.
The SNB sent shock waves through currency and equity markets on Jan. 15 by announcing it was abandoning its three- year-old cap of 1.20 per euro on the franc. The move presents "major challenges to the Swiss economy and in particular to the export and tourism industries," according to the Swiss government.
Italy may now be a better option than Switzerland for a lake holiday this summer, adding that British guests in his hotel are saying they will start going to Austrian resorts.
"People are asking if we can adapt the currency rate," said Isabelle Schenk, deputy director of the Omnia, a boutique hotel where the cheapest room is 500 francs a night. "We have to tell them 'we can't be responsible for national economic policy.' It's really bad for hospitality and for Switzerland."