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Geneva: Despite the strong Swiss franc, the tourism market is increasingly international

Worldwide capital of international organizations and biggest international financial center in terms of managing international private fortunes, Geneva remains a leading destination for business travelers and other diplomats. With a strong upscale hotel offer buoyed by international clientèle, the lakeside city is nonetheless trying to diversify its tourist profile.

With 200,860 inhabitants in September 2015, Switzerland's biggest Francophone city may appear modest in size, butit is at the center of an alpine conurbation with close to 500,000 inhabitants living around Lake Geneva. The international reach of Geneva nonetheless appears incomparable for a city of its size: its canton has close to 22 international organizations  and 250 NGOs, as well as 550 multinationals and subsidiaries of multinationals. The "Capital of Peace" thus has plenty in its defense and its quality hotel supply fully benefits from it. According to Laurent Terlinchamp, President of the Société des Cafetiers, Restaurateurs et Hôteliers de Genève (SCRHG), this same excellence made it possible for Geneva's hotel industry to maintain its good results within a less favorable economic context, marked by a strong Swiss franc: "Geneva has invested a great deal in the renovation and quality of its hotels. Because of this, the situation is better than we could have imagined at the beginning of the year."

In 2015, Geneva's hotel supply included close to 130 hotels, for a total of 9,225 rooms. Despite a fairly stable number of properties, the room supply has grown in recent years, from 8,049 rooms in 2000. The luxury segment nonetheless has more business than the other segments in the city: more than half of nights in Geneva are consumed in the city's 4 and 5 star hotels. There are fifteen four- and five-star hotels, more than fifty top gastronomic restaurants, and many services especially adapted to wealthy clientèle. Far from being limited to the luxury watches that gave the city its renown, the hotel room supply is characterized by its diversity, particularly for bigger budgets. 

The length of stay at Geneva's hotels is slightly more than two days. According to data from MKG Hospitality, thanks to a relatively stable occupancy rate of 70.3% in 2014 (+1 point), the city saw its RevPAR grow by 3.5% to 146.2€. These results are due to average daily rates unparalleled in Europe: 208€ per night, a figure up slightly over 2013 (+2%). The Romandy hub thus ranks at the top of the list of most expensive major European cities and is even ahead of Paris (150.7€) and London (147€). This is in great part due to the structure of the hotel supply, which that is dominated by superior categories. Moreover, business tourists represent more than half of all hotel nights, due to the city's particular, economic character that is driven by banking and financing activities. Congress tourism also represents an important share of hotel activity in Geneva, with 41 major international events last year, according to the International Congress and Convention Association. On a national scale, the Congress Bureau suggests that 27% of MICE events are organized in the canton of Geneva – only Zürich does slightly better (32%). Laurent Terlinchamp outlines the particular competition the city is subject to: "with 80% business tourism it depends less on regional sources than on international sources". The hotel industry in Geneva, which was able to "anticipate this change", is thus doing relatively well today, producing historic results in 2014 with 2.9 millions nights: 55,000 more than the last record year in 2008.

Figures for 2015 do not look as good as last year's, and are down slightly. From January to September 2015, the RevPAR fell 3.5% in Geneva – versus a slight drop by 0.5% for Switzerland overall. While the drop in occupancy was minimal across the year (-0.3 pts), this slump may thus be attributed to the negative variation in average daily rates, which were down by 3% on the year. The strong Swiss franc certainly contributed to this. According to Laurent Terlinchamp, President of the SCRHG, "the strong Swiss franc and the currency exchange rates resulted in stagnation for the hotel industry. It must nonetheless be observed that in Switzerland, the strongest drop could be observed in mountainous regions: Geneva's figures were resilient." After a difficult spring, Geneva's hotels achieved results that are more than encouraging. This outcome may perhaps be interpreted as tourists' desire to enjoy the waters of the Lake of Geneva as temperatures in the region rose. Compared to 2014, the RevPAR of hotels hotels in the city in July 2015 was up by 20.6%, for a less remarkable, but still evident, increase by 7.7% in August. Also of note: the summer increase in nights results exclusively from the increase in international arrivals; domestic clientèle fell significantly during this period. The calendar for Ramadan was also more favorable this year, allowing European hoteliers to benefit from a higher volume of Middle Eastern travelers at the end of July – a significant factor considering the upscale positioning of Geneva's hotel supply and its strong international component.

The particularity of the city's hotel industry is also due to the breakdown of its clientèle: of 2.9 million nights, 2.3 million were realized by foreign clientèle – meaning close to 81% of the total. In comparison, the proportion is 55.4% for Switzerland in its entirety, 49.3% in Bern, for a rate that reaches 70% in Zürich. With arrivals up, French and British clientèle had a stronger presence in Geneva's hotels, with around 250,000 nights (9% each). The United States - which led the ranking fifteen years ago - follows (238,000 - 8%). Other European countries represent 27% of clients – with Germany in the lead with 125,000 visitors.

With 220,000 nights in 2014, the Gulf Countries are at the bottom of the podium; fifteen years ago they were only 100,000. One of the particularities of tourism in Geneva is that it succeeded in attracting Middle Eastern clientèle by proposing an offer adapted to their needs. Between 2013 and 2014, growth was by 42%. Geneva's hotel industry tried to attract visitors from the Gulf who easily spend large sums of money during their stay, and generally book longer stays. According to the Geneva Hoteliers Association, 70% of travelers from the region go there to shop. The number of Chinese tourists on the shores of Lake Geneva is also up sharply with more than 92,000 nights and annual growth by 27% in recent years, the most significant change in the canton. Through a partnership with China Outbound Tourism Institute (COTRI), Geneva could bet the first Swiss destination to receive certification for the quality of reception it offers Chinese guests. Overall Asia represented 10% of nights in 2013 – 17% if we add the Gulf Countries. The percentage of nights spent by travelers from Africa was 4.2%. Geneva's tourism and hotel industry is aware of this international tropism, and met the challenge to adapt its supply to this varied public. In 2012, the city's tourist office launched "Geneva Amazing Experiences" - which are tourist itineraries designed in function of tourists' nationalities.

After more than doubling in the city between 2000 and 2014, Russian clientèle fell off sharply since the beginning of the Ukrainian crisis (-15%). Last year alone, there was a veritable desertion, with arrivals down 30%. In 2013 more than 100,000 Russian tourists stayed at Genevan hotels. In the longer term, Japanese clientèle also showed a significant drop from close to 150,000 visitors in 2000 to fewer than 50,000 per year at present.

In 2014, Geneva was elected "Europe’s Leading City Break Destination" by World Travel Awards – a first for a Swiss city. Leisure travelers represent only a small proportion of nights in Geneva's hotel industry - around 20%. The city's current tourism strategy consists of encouraging tourist arrivals with the most varied profiles, rightly encouraging Geneva's potential for "city breaks" that are appreciated by young generations and aficionados of low-cost airlines. In the same way, the challenge of Geneva's tourism lies in valorizing its supply in terms of leisure, sports and wellness. Another particularity of the city's hotels: they tend to empty out during the weekend, while they may congratulate themselves for high occupancy rates during the week thanks to business clientèle. It is a question of seducing potential tourists to take a few days stopover in the Francophone city.

To reach this goal, Geneva's position at a crossroads of Europe's transportation infrastructures is one of its major assets. The city is well serviced by all means of transportation: 935 flights and 200 trains stop there daily. In 2013, Geneva's airport handled 14.5 million of the 45.6 million travelers flying in and out of the country, placing it second after Zürich. There are currently about one hundred direct flights to the airport, which benefited from growth in its low-cost offer, as well as its proximity to the city center, just a few minutes by rail. An 80-minute transfer ticket is offered to each visitor arriving at Geneva's international airport. The hotel industry also facilitates the daily lives of tourists in the city: guests staying in Geneva's hotels receive a Geneva Transport Card upon arrival that allows them free access to the transportation network  (tramway, bus, train, and even the yellow taxi boats, the Genevan "Mouettes", to cross the lake). With the completion in 2019 of the cross-border line CEVA (Cornavin – Eaux-Vives – Annemasse), or the Leman Express, the city's transportation infrastructure will be further strengthened. The development of this express train line serving Greater Geneva will bring the adjacent canton of Upper Savoy closer, thanks to 16km of new lines serving 7 stations.

The city hosts many annual events that remain little known outside the country, with exception for the International Motor Show in March that was first held in Geneva in 1905. The number of visitors is up and came close to 700,000 at the last edition, making it the fifth biggest automobile salon in the world. Each summer the Fêtes de Genève draws in two million curious visitors: it is the most important tourist event in the country. Developed around a variety of artistic displays on the lake and ending with a massive light and sound show, the Fêtes de Genève were partly conceived to attract as many visitors as possible to the city. The effort met with success as far as concerns international clientèle, with arrivals up in summer 2015. Finally, the Bol d’Or Mirabaud takes place on the lake each June. In recent years the starting point of this regatta has seen between 500 and 600 sailors and enthusiasts from around the world.

A few changes have also taken place in the city in terms of hotel supply. The emblematic Hôtel de la Paix joined Ritz-Carlton in October and the property that opened in 1865 saw its number of rooms shrink to 75 to improve the comfort of its luxury clientèle. Acquired last May, the former Bellevue de Genève, which once housed the offices of the bank HSBC at 37 Quai Wilson, should reopen its doors over the next few years – it will be the ninth five-star hotel on the shores of the right bank. Redesigned as a 26-suite boutique hotel with a restaurant with a starred chef, its opening should not upset the city's hotel supply overall. Inversely, the Crowne Plaza Geneva, which welcomed its first clients in 2014 after its renovation, has no fewer than 336 rooms.

While its quality offer allowed Geneva to resist international competition, it is perhaps the diversification of its hotel supply that could be the key to boosting tourism. Although the city has the biggest youth hostel in Switzerland in terms of beds, it nonetheless has a limited supplyfor tight budgets. It is difficult to ignore the tourism potential of this city in the center of Europe, with ultramodern infrastructures and an ideal quality of living. Undoubtedly Geneva will be able to attract new leisure travelers, mountain lovers, and others who wish to discover the calm offered by the "Capital of Peace".

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