Abandonment of the EUR/CHF minimum exchange rate. How Swiss ski resorts were impacted and how they reacted to De-cisive new conditions

Abstract

In the second part of the previous century, Switzerland could claim to be one of the most well-known destinations for winter sports in the world. Some of the world-famous resorts include Verbier, St. Moritz, and Davos-Klosters. These places have gained lasting recognition over many of the past dec-ades. Even though they have lost some of their lustre at times, Swiss winter sports resorts were able to attract numerous guests from both nationally and internationally, even during the difficult years of the recent financial crisis. All this allegedly changed, however, in January 2015, when the Swiss National Bank unexpectedly removed the peg with the euro. This move immediately shot the Swiss franc to become one of the best performing currencies in the world, and its value rose significantly. All the industries dependent on exports were expected to be hit very hard. This type of sudden increase in the value of their currency would have reflected very damagingly on their revenues, especially since the currency in decline was the one in which most Swiss companies trade. Tourism industry operators started complaining imme-diately, noting their inability to do anything with regard to the sudden change. They had no time to adjust. In hindsight, the much proclaimed end of the Swiss tourism industry did not materialise. The number of tourists from non-European nations has grown to record levels over the past two years. This might indicate the new focus that companies in the Swiss tourism industry have taken. It appears that they are attempting to divert the market attention towards developing nations. BRICS nations – along with the Gulf Nations – would be some of the best examples. Most importantly, it is possible to see that the number of tourists is going back up to previous levels. Politically, the nation was more or less happy with the overall outcome of the removal of the peg. There are no more fears of hyperinflation, and the EUR/CHF exchange rate stands at approximately the same level as during peg-times.