Swiss ski resort regions defied an unseasonably warm January with strong occupancy recovery and rates that outstripped pre-pandemic levels.
For the first winter ski season without pandemic travel restrictions, the Bernese Oberland saw average occupancies of 63.5% in January 2023, exceeding 2019 (56.5%), 2020 (60.2%) and 2022 (59.8%), according to STR data.
Interlaken, meanwhile, recorded occupancy levels of 45.7%, just slightly lower than the 46.6% recorded in January 2020. Grisons was still 4.9 percentage points behind 2020 at 61.3% occupancy despite the annual World Economic Forum in Davos taking place during the month.
In Zermatt, occupancy recovered to 74.1% during the month, just shy of the 74.4% it recorded in 2018 and exceeding 2019 (71.3%) and 2020 (71.5%).
The KOF Swiss Economic Institute predicted last year that overnight stays would beat pre-Covid levels, following a profitable summer season for Swiss hotels.
Regions also saw booming average daily rates (ADRs) and therefore revenue per available room (revpar) during January. Zermatt, Grisons, Interlaken and the Bernese Oberland all reported five-year highs across both revpar and ADR, with Zermatt again particularly seeing the biggest increase in revpar, from €378 last January to €455.
This is despite some resorts having to divert prospective skiers to alternative activities during the month of January due to a lack of snow. Switzerland recorded its highest-ever January temperatures north of the Alps on New Year's Day, with 20.2C recorded in Delemont, canton Jura.
“A lot of time, people are booking those weeks off, it could be non-refundable, so they’re just committed and locked into it,” pointed out Alexander Robinson, director – industry partners at STR. “Ski trips are going to be slightly longer tail than a weekend city break.”
Switzerland is also likely to attract a more affluent traveller, particularly Zermatt, with its January ADR of €614. More than a third of the rooms in Zermatt come under the luxury segment, and given its impressive occupancy and rates, this is perhaps another sign of the global resilience of luxury travel as well as the growth seen across this market in recent years, suggests Robinson.
Upscale strategy
Performance in the Alps, despite poor conditions and rates that are higher than ever, could also explain why US companies are looking to invest in the market, he added – Vail Resorts bought a majority stake in the company that runs the ski lifts and a swathe of property in Andermatt last year.
Zermatt’s pipeline will see further luxury and upscale supply in the coming years, with a 69-bedroom Ritz-Carlton set to open in 2026. Meanwhile, Crans-Montana has an impressive three five-star properties in the pipeline, with a 78-bedroom Six Senses expected this year, a 41-bedroom hotel opening under Hyatt’s Unbound Collection in December, and a 106-suite luxury eco-spa Aminona Resort on the cards operated by Lefay Resorts & Residences.
However, even luxury resorts will not be able to guarantee a continuous 100-day ski season, according to a recent study by the University of Basel, which found that unabated greenhouse gas emissions will cause a lack of natural snow at areas below 1,800–2,000m by the mid-21st century.
Although the report said it will initially be possible to compensate for this with artificial snow, by the end of the century this will become less certain within a context of competing water demands and even artificial snow-making reliant on conditions not being too warm or humid. The report concluded that the economically important Christmas holidays were also “increasingly at risk” under a high-emission scenario by the late twenty-first century.
Diversification potential
With climate change likely to have a massive impact on when and how much snow falls at a certain time, resorts that previously relied on winter sports tourists are going to have to look elsewhere. Many were already doing this as they looked to spread guest numbers over more of the year.
One company that is thinking outside the box is Vertell Asset Management. The group acquired four Arenas resorts in Switzerland last year, which it has relaunched under a new brand called Faern.
The company thinks there is an opportunity in promoting the wider health and wellbeing benefits that mountain resorts can bring.
“There have been a lot of misconceptions about the mountains, but from an investment point of view, from different types of investors – private equity or institutional – there is a lot of potential in the mountains,” said co-founder and chief executive Romain Semmel at last year’s Resort & Residential Hospitality Forum.