How is the city performing as a destination? What is the demand from travellers? And how is the city’s tourism strategy changing?
In January 2019, the city of Geneva saw a major change take place at the top of its leading tourist organisation. The new President of the Geneva Tourism & Congress Foundation was named as Sophie Dubuis, an experienced figure in the industry who had been member of the organisation’s Board of Trustees since 2017.
To Dubuis, the challenge ahead of her was clear – build on the hard work of those who had come before her and bring new visitors to Geneva, without betraying the city’s unique essence. This has meant maintaining Geneva’s position as a leading global business destination, while placing greater emphasis on attracting leisure visitors by promoting the city’s cultural attractions.
Geneva is world-famous for being home to international organisations like the United Nations (UN) and its various agencies, the World Economic Forum (WEF) and the European Organisation for Nuclear Research (CERN). This has made it the city a bustling business hub. However, with overnight stays rising by 5.84% in 2018, Dubuis is keen to increase the proportion of leisure visitors arriving in Geneva from a relative minority of only one in every five travellers.
Will Dubuis succeed? Either way, her leadership is shaping the city’s tourism strategy in a huge way – and this may deeply impact the tourist market.
Can Geneva boost its leisure tourism market?
Tourism is a huge growth area for Geneva, with the city looking to make the most of its appeal to international travellers. In 2018, the city reached 3.2m overnight stays. This included almost 200,000 extra visitors in comparison to 2017, while representing a 9% leap in arrivals over the last five years (higher than the WTO Tourism Barometer’s global average of roughly 7%).
This doesn’t mean, however, that Geneva has seen a huge influx of holidaymakers travelling for leisure. Realistically, the city has seen a much higher proportion of business travellers arrive at its airport and rail stations. Geneva is essentially a business destination, with eight out of every ten overnight stays accounted for by those visiting for work or an event.
A city for business
According to the World Travel & Tourism Council’s Travel & Tourism: Economic Impact 2019 report, 78.5% of global tourist spending comes from leisure travellers – with the remaining 21.5% travelling for business. This is in stark contrast to Geneva, which almost boasts that exact opposite ratio of business/leisure visitors. It is no wonder that Geneva Tourism is looking to change this and find a greater balance between the two.
Despite the desire to develop opportunities in leisure tourism, the importance of business tourism to Geneva should not be understated. The city’s appeal in this area comes primarily from the fact that many prestigious international organisations have headquarters based there. As mentioned, the UN has a huge presence in the city, which provides a base for agencies like the Office of the United Nations High Commissioner for Refugees (UNHCR), the United Nations Human Rights Council and the Office of the United Nations High Commissioner for Human Rights (OHCHR) – as well as the International Labour Organisation (ILO).
Geneva is also home to the International Committee of the Red Cross (ICRC), the International Federation of Red Cross and Red Crescent Societies (IFRC), the International Organisation for Standardisation (ISO), the World Health Organisation (WHO) and the world-famous Large Hadron Collider located right on the border between Switzerland and France.
More growth available to MICE market
Even so, there is still plenty of potential to be realised in Geneva’s Meetings, Congress, Incentive and Exhibition (MICE) industry. Currently, it is only 75th in the International Congress and Convention Association (ICCA) rankings after hosting 38 international meetings in 2018. This represents almost a fifth of Switzerland’s 208 international meetings, which places the country at 20th on the ICCA rankings by country.
For context, Paris (in first place) outperforms the entirety of Switzerland’s MICE market, hosting 212 international meetings in 2018. An unfair comparison, perhaps, but it does highlight how much room for growth there is still to take advantage of in Geneva. The challenge for the city in this area is that competition across the continent is incredibly strong, with European countries accounting for 52% of all the world’s international meetings.
Industry leaders have already pointed to potential directions for this development – including the large-scale addition of MICE space. For example, Geneva currently offers 106,000sqm of exhibition space, while Basel (129th on the ICCA ranking by city with 22 meetings) has 150,000sqm. It’s an odd situation for a city relying heavily on business tourism for visitors to be in.
The ongoing development of opportunities for recreational and cultural attractions are also seen as a key element in attracting high-profile MICE events. This supports Geneva Tourism’s push for a greater focus on leisure visitors, suggesting such a shift would benefit both types of traveller arriving in the city.
Opportunities for leisure in Geneva
When it comes to leisure tourism, Geneva and its surrounding region boast a wide variety of touristic assets – especially in the areas of lifestyle, heritage and culture. In terms of lifestyle, Geneva is well-known for offering luxury shopping and is home to a great many prestigious brands. It is particularly renowned for being the birthplace of watchmaking, with modern day stores bringing tradition and lifestyle together in their stylish timepieces.
For visitors looking to discover the traditional Swiss experience, Geneva is home to a great many restaurants offering different takes on Swiss gastronomy (including the wine and chocolate). It is an aspect of the city that Geneva Tourism is keen to play on in attracting tourists on their way to, or back from, their ski holidays.
With regards to local heritage, Geneva also offers visitors and array of cultural attractions. These include CERN, the International Museum of the Red Cross and Red Crescent, and the Geneva Conservatory and Botanical Gardens – alongside a variety of events taking place throughout the year.
Geneva is seeing more visitors than ever
In 2018, the city recorded a total of 3,232,871 overnight stays. This was an increase of 5.84% on 2017 and marked Geneva’s best performance over the 2014-2018 five-year period. According to the Geneva Convention and Visitors Bureau, this rise in overnight stays broke the city’s attendance record, demonstrating just how successful the city has been at attracting tourists.
Geneva has also shown itself to be a dynamic and resilient market. The figures for 2016 are a key example in showing this. During that year, the number of overnight stays dropped from 2,952,659 in 2015 to 2,928,195 (a decrease of 0.83%). However, the market recovered rapidly, leaping 4.31% to 3,054, 435 overnight stays in 2017 – a growth trend that has established itself with the record results for 2018.
Occupancy rates are soaring as well
When it comes to accommodation supply, Geneva and the surrounding area has a total capacity of 443 hotels – comprised of 9,653 hotel rooms and 15,828 beds. Most of these properties fall into the mid-range segment, which makes up 55% of the city’s entire hotel supply. The upscale segment represents a further 19% of the market, with luxury hotels also providing 19% of the city’s hospitality offering. The rest of the supply comes under the entry-level segment, which accounts for only 7% of Geneva’s hotels.
Annual occupancy rate (OR) has risen strongly in line with the growing number of overnight stays. Over the last seven years, it has jumped from 64.3% in 2012 to 73.8% in 2018. As with the figures for overnight stays, 2016 saw a slowdown in OR growth but managed to maintain its upward trajectory. Overall, the city’s OR has seen remarkable results that reflect the real success of the destination. Geneva is not just attracting more people; it is filling a greater number of the available hotel rooms as well.
ADR has fallen, while RevPAR fluctuates
Geneva’s hospitality industry is in an interesting position. Even though demand is increasing, the average daily rate (ADR) for hotel rooms has consistently fallen. This means that, while visitor numbers are up, hoteliers are having to fill more rooms than ever to keep their revenue steady. The real question is: are they succeeding?
Despite the positive results for overnight stays and OR, ADR has shown a downward trend over the last six years. It has dropped from a high of CHF 273.65 including-VAT in 2012 to CHF 226.65 incl.-VAT in 2018 – a 17.17% overall decrease across the period. The fall in rates has slowed in recent years, however. Between 2017 and 2018, rates dropped by 1.3% – a positive performance in comparison to the 6.9% decrease in tariffs between 2012 and 2013. It shows that the decline is still in effect, but at a steadier pace than was previously the case.
Falling ADR has had a varied impact on revenue per available room (RevPAR) in Geneva’s hotels. In 2013, the year of the biggest drop in rates, RevPAR also fell by 6.0%. However, OR has played its part in fluctuating RevPAR results – with 2018’s 1.4% increase in OR fuelling 0.5% growth in RevPAR that year. This was also the case in 2014 and 2015 when an OR rise of 2.4% and 1.9% led to RevPAR increases of 3.6% and 1.8% respectively.
Ultimately, RevPAR has fallen by 4.92% between 2012 and 2018, demonstrating how the 17.17% drop in ADR has negated the rise in overnight stays and OR. It is no wonder that Geneva is looking to regulate Airbnb accommodation in an environment that is proving a challenge to the city’s hoteliers.
A destination for all seasons?
One of the issues with Geneva relying mostly on business travellers for its tourism is that seasonality has a much greater impact on its overall performance. So, when events and conferences are running, the number of visitors increases accordingly – only to drop off significantly when there is less MICE activity taking place.
This is one of the main reasons Geneva Tourism is aiming to raise the profile of the city as a leisure tourism destination. It would still experience a degree of seasonality but would be better protected against holidays such as the Christmas period where major workplaces largely shutdown until the New Year.
How occupancy changes with the seasons
In general, tourism in Geneva peaks at three points in each year: March, June and September. The spike in visitors during March is mainly attributed to the Geneva International Motor Show, an important annual date on the automotive industry calendar. In 2018, the event attracted 660,000 visitors to the Palexpo convention centre between 8 March and 18 March of that year. This highlights just how important exhibitions like these are to Geneva’s tourist industry overall.
The increase in visitors that takes place during June each year roughly coincides with Ramadan. This is due to tourists from the Gulf states (including Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Oman) making up the third largest group of foreign visitors to Switzerland as a whole. In 2018, 2252,885 visitors from these countries arrived in Switzerland, marking a 1.5% increase on 2017. Many of them travel to Geneva in June, July or August, depending on their religious holiday schedule.
As for the peak in visitors during September, this is due to it being a strong month for both business and leisure tourism. It features the combination of people coming back from holiday to work and those travelling outside the traditional summer holiday period in the northern hemisphere.
The seasonality of Geneva’s tourist arrivals is where you can most easily see the effect of a market heavily reliant on business visitors. The city experiences its quietest periods during April and the winter season when there is a much lower amount of seminar and event activity. Conversely, the number of travellers arriving for the Geneva International Motor Show in March and those visiting for The Autumnal exhibition taking place in November – a large event that covers a wide variety of sectors and attracted 140,000 attendees in 2018. It will be fascinating to see how seasonality continues to affect Geneva’s tourist market as the city increases its numbers of leisure travellers across the year.
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