Switzerland: a model of success between prosperity and new challenges

A look at the numbers explains why.

Switzerland’s tourism industry has once again delivered a strong performance. With a record 43.93 million overnight stays – an increase of 2.6 per cent compared with the previous year – 2025 has gone down as the most successful year in the sector’s history. Yet behind every idyllic holiday postcard lies an industry that must operate efficiently and remain economically resilient. Over the past two decades, tourism has consistently contributed around three per cent to Switzerland’s gross domestic product. In the country’s mountain regions, its importance is even greater, accounting for roughly one-fifth of regional economicoutput. 

At the same time, the current year has highlighted just how closely tourism is tied to global developments. Heightened geopolitical tensions, most notably the conflict involving Iran, as well as the broader instability across the Middle East, have disrupted international air travel and noticeably shifted patterns of demand. 

For the industry, this serves as a reminder of how quickly travel behaviour can change. While demand for Switzerland remains strong overall, driven primarily by visitors from Europe and the United States, the recent shiftsunderline how deeply Swiss tourism is intertwined with global political and economic dynamics. Although these changes are not regarded as signs of a structural weakness, they illustrate the sector’s sensitivity to an increasingly volatile international environment. 

For precisely this reason, overnight stays and revenue figures alone do not tell the whole story. Tourism is about far more than economic indicators. It sustains jobs, shapes entire regions, and plays a vital role in ensuring thatSwitzerland’s mountain areas remain vibrant places to live and visit. 

To gain a more comprehensive perspective, we spoke with Andrea Jörger, Managing Partner of Horwath HTL Switzerland, about the key developments, underlying trends and broader context. What changes are shaping the market? Where do the greatest opportunities lie? And just as importantly, which risks should not be overlooked? 

In his view, Swiss tourism is in “remarkably strong shape.” Not only has the sector recovered from the pandemic, it has returned to record levels of performance. International demand, in particular, continues to growdynamically, with the United States leading the way.  

Growth Between Opportunity and Challenge 

Switzerland’s cities continue to outperform the rest of the market. According to Andrea Jörger, they are experiencing “strong demand at very high price levels”, benefiting from consistently high occupancy rates and sustainedvisitor demand. Major urban destinations such as Zurich, Geneva and Lucerne recorded growth in overnight stays of 3.3 per cent, while smaller cities performed even slightly better, with an increase of 3.4 per cent. Basel, by contrast, has seen more moderate growth, reflecting the weaker performance of its trade fair and exhibition business. Traditional Alpine holiday destinations and rural regions also continued to grow, although at a moremodest pace, each posting an increase of 2.4 per cent. 

International visitors remain the principal driver of this growth. While domestic demand increased by 1.4 per cent, international markets expanded much more strongly. Europe led the way with growth of 3.9 per cent, followedby long-haul markets at 3.4 per cent. Particularly noteworthy were visitors from the United States, up 5.4 per cent, the United Kingdom, which grew by 7.5 per cent, and China, recording an impressive increase of 9.3 per cent.“The United States has seen its strongest growth in many years,” says Andrea Jörger, noting that this is particularly remarkable given the weakness of the US dollar. The explanation, however, lies elsewhere, most notably in persistently high inflation in the United States. “For many Americans, it is now cheaper to fly from New York to Andermatt for a skiing holiday than to ski at home.” 

Asia also represents considerable long-term potential, as reflected in the renewed growth of Chinese tourism. India, with an increase of 1.8 per cent, is likewise emerging as an increasingly important source market for Switzerland. Unlike the US market, however, demand from Asia has become noticeably more volatile. Since the escalation of the conflict in the Middle East earlier this year, Switzerland has seen a decline in visitors from keyAsian source markets, including China, India and South Korea. Higher airfares, longer flight routes and greater uncertainty surrounding travel planning have all contributed to fewer travellers from these countries choosingSwitzerland as their destination. 

Back to Domestic Travel – The Evolution of Switzerland’s Home Market 

Since the Covid-19 pandemic, domestic tourism has become an even more firmly established pillar of the Swiss tourism industry. Before the pandemic, Swiss residents accounted for around 45 per cent of all overnight stays. During the period of international travel restrictions, that share rose to almost 70 per cent, and it has since stabilised at around 50 per cent. As a result, domestic demand continues to play a crucial role, particularly during the winter season. At the same time, the competitive landscape has changed significantly. “It is no longer cheaper to go skiing in Austria or Italy – that era is over,” says Jörger. Even destinations traditionally regarded as Switzerland’s price competitors, such as Tyrol and South Tyrol, now offer ski holidays at broadly comparable price levels. 

Growth is also increasingly being driven by the summer season, which continues to gain momentum. In the past, many tourism businesses closed during the traditional shoulder seasons of spring and autumn. Today, however, the industry is steadily moving towards year-round operations, albeit at varying speeds. “There is now a broad consensus that destinations will need to operate all year round, or at least for most of the year,” Jörger explains. “But this is not yet the reality everywhere, and it is certainly easier said than done. Achieving this requires the coordinated efforts of all stakeholders within a destination.” 

This transformation is particularly evident in destinations such as Grindelwald and Interlaken, where occupancy rates remain consistently high throughout almost the entire year. In St. Moritz, too, the first hotels have begunoperating year-round. International visitors are a key factor in this development, as these destinations attract long-haul travellers whose demand is spread more evenly across the seasons. By contrast, more domesticallyoriented destinations such as Arosa remain far more seasonal. “To this day, very few Swiss people choose Arosa for a holiday in May,” Jörger notes.  

Another profound structural shift is taking place in the accommodation sector. Traditional hotel business models are increasingly reaching their economic limits, meaning that new projects, and particularly their financing, mustbe approached differently. Construction costs have risen sharply, planning and approval procedures have become increasingly lengthy and complex, often delayed by objections, while financing has become considerablymore difficult. Factors such as the disappearance of Credit Suisse, the implementation of the Basel III banking regulations and a lack of sector-specific expertise among lenders have all contributed to banks becoming farmore cautious.As a result, many new hotel developments are now only financially viable when cross-subsidised through serviced apartments or second-home developments. Consequently, professionally managed holidayapartments have become an increasingly important part of the accommodation landscape. 

At the same time, Jörger warns against excessive expansion. “We need to ensure that the market does not become oversupplied, or that individual destinations, particularly smaller ones, are not overwhelmed by newdevelopments. In addition, the earning potential of serviced apartments is limited by restrictions on their permitted use.” 

The Other Side of the Tourism Boom 

Yet every boom has its downside. Unsurprisingly, strong demand has also driven prices upwards. Across many parts of Switzerland, average room rates have reached levels that would have seemed unimaginable before the pandemic, with the luxury segment standing out in particular. At the same time, tourism businesses are facing mounting pressure. Rising labour costs, a persistent shortage of skilled workers, and increasing expenditure on maintenance, energy, insurance and other operating costs are squeezing profit margins and offsetting part of the gains generated by higher revenues. These challenges are structural rather than temporary. Althoughconditions have eased somewhat since the particularly difficult post-pandemic years, “the labour shortage is here to stay for well-known reasons,” says Andrea Jörger. 

In response, many businesses have had to reduce opening hours or adapt their services. This has encouraged new approaches, ranging from closer cooperation between operators to more efficient business models. “Weneed to move away from old ways of thinking and embrace new approaches,” Jörger explains. Against the backdrop of these structural challenges, digitalisation and artificial intelligence are becoming increasingly important. For tourism businesses seeking to remain competitive, these technologies can no longer be viewed as optional add-ons or “nice-to-have” innovations. Instead, they are rapidly becoming an integral part of day-to-dayoperations. Implementation across the Swiss tourism sector, however, remains highly uneven. “We are no different from anywhere else,” says Jörger. “Some businesses are still operating much as they did 30 years ago, whileothers are already far ahead.” 

The greatest potential lies in processes that can be standardised. Across the customer journey, in revenue management and throughout back-of-house operations, artificial intelligence can improve efficiency and help relievepressure on scarce human resources. The need to modernise is becoming particularly evident in the mid-market segment. Even so, personal service remains at the heart of the tourism experience – especially in the luxurysector, where, according to Jörger, guests are more willing than ever to pay a premium for genuine, professional Swiss hospitality and truly exceptional experiences. 

Technology can undoubtedly make processes more efficient, but it also has clear limits. “At the end of the day, it will still be the bartender mixing the cocktail and the housekeeper preparing the room,” Jörger says. Striking the right balance between technology and human interaction will therefore be essential for long-term success. After all, hospitality cannot be digitalised and in an increasingly automated world, a warm smile may well become the industry’s most valuable competitive advantage. 

Perspectives for Swiss Tourism 

Looking ahead, the outlook for Swiss tourism is one of continued growth, but also of growing complexity. According to Andrea Jörger, one of the market segments with the greatest potential is the luxury sector, by which he means the true high-end market, built around clearly positioned, world-class products. 

At the same time, opportunities are emerging at the opposite end of the spectrum. Lean, highly digitalised concepts in the mid-market segment are becoming increasingly attractive, where operational efficiency, streamlinedprocesses and precise customer targeting are the key ingredients for success. Jörger believes this offers considerable opportunities both for destinations and for innovative business models. 

The space between these two ends of the market, however, is becoming increasingly difficult to occupy. Products without a clear identity are coming under growing pressure. “What will become increasingly difficult areproducts that aspire to be more than they really are, without offering a clearly defined profile. A small spa with no concept and a conference room in the basement will not make the difference.” 

Ultimately, the future belongs to businesses with a clear vision and a distinctive market position. Whether uncompromisingly luxurious or rigorously efficient, success will depend above all on strategic clarity. In a destinationsuch as Switzerland, where tourism continues to grow, competitive advantage is no longer determined simply by what is offered, but by how convincingly and consistently a business positions itself in the market.