Economic Report
Hui Wen Chiu

Introduction
Hotel Glorious is one of the small family leisure hotels in the famous ski resort of
Leysin, Switzerland. Hotel Glorious ha 40 rooms and one restaurant. As for the facility, they have one small Spa for guests to enjoy it. Hotel Glorious has opened for
6 years from 2007 to 2012. During six years, their revenue didn’t go well and grew slowly. Therefore, they tried to find out the reasons and resolved the problems that they faced to.
In this report, I will discover what kinds of impacts that affected the hotel and give some strategic advises to improve the hotel revenue. At the end, I would like to discuss about joining the brand in the positive and negative aspects.

What is the impact?
The influences come from different aspects. The external impacts can be the recession and the inflation. Moreover, the tourism market is changing everyday in different season; therefore, the price can be difference depend on the demand. I am going to discuss the effect respectively.

Recession
During 2008 and 2009, the global faced a difficult situation- the economic recession.
However, did that really impact the economy in Switzerland? There is one survey,
SWITZERLAND: ECONOMIC EXPANSION ALMOST CAME TO A STANDSTILL IN
Q4 2011 (2012), Lambert conducted that the Swiss
GDP growth rate was affected by the recession in
2009. Besides, from the chart of Swiss GDP, I can certainly see in 2009, the
Swiss GPD growth rate did not grow up instead of decreasing. (Lambert, 2012)
However, on the other research, SWITZERLAND: ECONOMIC GROWTH, GDP
CONTRACTED Q-O-Q IN Q2 (2012), Pictet argued that the Swiss economy was not in recession because the Swiss real GDP growth was still higher than entire Europe area. From the chart of the real GDP growth, it shows that although the GDP growth rate decreased, the Swiss real GDP growth rate was better the Europe real GDP growth rate in 2009.

(Pictet, 2012)

In my opinion, the recession did affect the hotel revenue because the economic crisis affected not only the US but also whole world. However, the effect in Switzerland might not be as dramatic as Europe area. In Switzerland, according to the analysis report, Switzerland Economy (EconomyWatch Content, 2010), they had lower the average tariff rate and government intervention; thus, the international trade was more flexible and competitive. I agree this reason that the economic crisis did not have the huge impact on the hotel revenue.
Furthermore, on the basis of the report, SWISS TOURISM IN FIGURES 2010,
STRUCTURE AND INDUSTRY DATA (Department of Swiss Tourism Federation,
2011), tourism industry is one of the key parts in Swiss economy. From the table, between 2008 and 2009, the total of expenditure of Swiss tourists abroad remained the same and the revenue from the foreign tourists did not affect by the recession significantly. I deduce that the number of tourists did not reduce by the recession.

(Department of Swiss Tourism Federation, 2011)
To sum up, the recession had influenced the world economy. However, the economy and the tourism industry in Swiss did not affect obviously by the recession. Therefore, the recession can be one of the impacts to the hotel but not the major one.

The strong franc in Switzerland
According to the BBC news, Strong Swiss franc 'could bring recession’; Foulkes
(2011) cleared that
“Switzerland's traditionally strong and stable economy is dependent on successful exports. More than 50% of Swiss products are sold abroad. In the last 18 months the franc has increased 25% against the euro and the dollar, making Swiss products much more expensive abroad.”
The strong franc increasing affected not only the tourism industry but also the manufacturing industry. For example, a kilo of Swiss Emmental cheese costs 15 euros
(£13; $22), while the mass-produced French and German imitations cost just nine euros a kilo. Nowadays, people have to pay more money because of the strong franc.
The cheese makers have to raise the price reasonably. However, if they raise the price, they will lose the customers and profit.
In my point of view, this problem also can be reflected in tourism industry. The travelers have to pay more money to travel in Switzerland. Here has one report,
Travel and Tourism in Switzerland (Anon, 2013), pointed that there was a lot of challenges in 2012 because of the remaining strength of the Swiss currency, lower arrivals among European tourists and weak domestic tourism growth. Therefore, the number of domestic tourism trips was effectively static and arrivals declined by 4%.
Moreover, the analysis report, Swiss tourism in figures 2012, Structure and InduStry data, Department of Swiss Tourism Federation (2013) pointed out that the day trips have reduced from 2008 to 2011.

(Department of Swiss Tourism Federation, 2013)
Due to the day trips reduced and higher payment, the suppliers in hotels also decreased year by year. From the table below, the open establishments declined sharply. (Department of Swiss Tourism Federation, 2013)
At the end, I agree that the strong franc affected the tourists’ decision and the cost of the hotels. If the hotel cannot balance between the expenditure and revenue, it will bankrupt as soon as possible.

The demand and supply of hospitality industry in Switzerland
According to the report of the Swiss tourism in figures 2012 Structure and InduStry data, Swiss Federal Statistical Office (2013) showed that Switzerland was the champion in the number of trips with overnight stays which compared to other countries. Besides, the number was growing from 2008 to 2011. From this analysis, I expect that the demand of the hotels will increase to face the number of tourists.

(Department of Swiss Tourism Federation, 2013)
However, the accommodation services were decreasing from 2009 to 2008. This chart was against to my previous aspect that lots of tourists came to Switzerland for traveling.
Moreover, the occupancy rate did not rise continually in different kinds of hotels. There must be some of the reasons that affect the demand of the hotels.
(Department of Swiss Tourism Federation, 2013)

(Department of Swiss Tourism Federation, 2013)

As I mentioned before, the recession and strong Franc were the effects of the hospitality industry. The demand and supply of the hotels could be influenced directly.
If the demand of the hotel accommodations grow up but the suppliers is not as much as the demand, the price will go up (Figure 1). In the other words, if the supplies of hoteliers reduce but the demand from the guest remain the same; the price will go increase (Figure 2).
The recession brought down the economy in
Switzerland; however, the rate of travelers did not influence greatly. Demand of the hotel accommodations increased instead of reducing.
Consequently, The price will grow up. The situation can be applied to the figure 1.

Figure 1. (Bromley, 2006)
As for the effect of strong Franc, people did not come to travel because of spending more money. Besides, hotels had to spend more money to buy the products. Thus, The demand of accommodations still remained the same but the hotel suppliers reduced. In this case, the price automatically increased.
It can be refer to figure 2.
Figure 2. (Bromley, 2006)
On the report of the Swiss tourism in figures 2012 Structure and InduStry data, Swiss
Federal Statistical Office listed down the price in different hotel categories from 2008 to 2011. From the table, the hotels’ entire room rate increased every year. It can proof that my judgment is right.

(Department of Swiss Tourism Federation, 2013)

The strategies for the Hotel Glorious
The hotel Glorious itself have some unique benefits, which cannot be compared to other city hotels. For example, it has the best location in the popular ski resort which means the hotel already have the advantage to attract the ski lovers or the travelers who would like to enjoy the winter sports. Moreover, hotel Glorious is not a large hotel so it is much easier to control the cost and income. Base on these benefits, they can create different plans to resolve the problem of steady growth. Different strategies have to use in different situations. Some of the strategies are listed below that might fit to the hotel in order to increase the profit growth.

• Different packages and promotions

During the 2008 and 2009, they faced the problem of the economic recession.
However, it did not affect dramatically to the tourism industry. People still came to
Switzerland for traveling. Vong (2012) pointed out that market campaigns could be more personalizes and increase the sharing experience. In the market strategy, I believe that find out the target market and make different packages to create the unique reputation are the best way to attract customers. For example, hotel can cooperate with the ski resort to attract the ski lovers and provide the shuttle bus during their stay. In this case, they do not need to worry about the transportation. As for the new travelers, they can create some day trips to introduce the surrounding area and teach the basic skiing skills. These strategies can be different from other properties and establishes their own reputation that people will share to their friends.

• Cost control

The strong franc made the Swiss products become more expansive. Therefore, cost control is very important in the hotel. On the base of the paper, The Advantages of
Cost Control, Wolfe (n.d.) said that the cost control could lower the expenses. I agree with his opinions. For instance, the facilities in the hotel can be changed into energysaving products. The light can be changed into automatic light that it will not waste the energy if there have no people. Moreover, he also mentioned that it is better to record the cost. In this case, the planner can be more clear where the money go and do not abuse money. As I mentioned before, hotel Glorious is a 40-rooms family hotel.
Therefore, it is much easier to control and manage the cost.

• Lower the price

Reducing the price can be useful in the short tern but it is not the best strategy to resolve the problem. Apply from the article, 10 Key Reasons Pricing Low Is Bad
Business For Retailers (Miller, 2012); people will suspect hotel quality and the competitors can lower their price to attract more guests. In the long tern, this will turn into a bad circulation. The suppliers will try to find the cheapest products to reduce the cost and the quality will be affected. Therefore, the travelers will be disappoint with the hotel and never come back again. In addition, the reputation will go down. In my opinion, no guest no money; thus, how to keep and increase the guests is more important than playing with the price.
In summary, the marketing strategies have to stick into the advantages of the hotel and create its own value. The unique value can increase not only the competitiveness of the hotel but also customers and money.

The argument of joining the chain hotel
Nowadays, chain hotels are getting popular and people talk about franchise in hospitality industry. However, dose it really work on in every hotel? Dennis (2013), the technical marketing manager at Buuteeq, evidenced that the franchise hotels can catch frequent travelers who participated in loyalty program. These kinds of guests are more like business travelers. Business travelers understand what they want and expect to hotels. Therefore, they will choose the chain hotel without a doubt.
Although enjoy the chain have to pay some of the cost and hassle of providing additional services for guests, it can bring not only the loyalty guests but also other extant marketing channels run by the franchise brand. In other words, hotels get the free promotions and only need to follow the standard. This is one of the biggest advantages to the hotel.

(Dennis, 2013)
However, what I thought is when the hotels enjoy in the chain, it is equally lose the freedom. According to the article, Hotel Franchise Disadvantages, Wickford (n.d.) declared that franchise could restrict the hotel operation. For example, hotel has to follow the brand standards and limit the independent owner's ability to focus on a specific areas or clients. Furthermore, the reputation can be affected by any properties in this brand. Therefore, this is one of my disagreements that the Hotel Glorious become a chain hotel.
The other disagreements is that people who come to Switzerland are more like have fun and relaxing especially in the well-know skilling place. What they want to have is the comfort small rooms and simple meal instead of having the luxury room or breakfast. According to the research, Challenges of hospitality in the High Alps, Lüthi
(2014) analyzed the tourists’ demand in the High Alps. 60% of the travelers were the mountain hikers and had the members of an alpine club. Besides, 75% guests spent one night at a hut and 60% guests could accept to pay higher for the comfort per night.

(Lüthi, 2014) From this analysis, I would like to say that the hotel market in the High Alps is more prefer to the small boutique hotels rather than chain hotels. Therefore, I believe that as a character of small family hotel has more potential to grow and create their reputation. Conclusion
From this economic report, the rescission and strong Franc influence not only the whole world but also the hospitality industry and the hotel price in Switzerland. These problems can be serious if the hotel Glorious does not care about it. In addition, the
Hotel Glorious has to analyze what they were suffered and came out with the strategies to rescue their revenue instead of escaping the problems.
Different strategies can be used in different ways. However, in my point of view, the strategies have to base on their advantages and create its value. Use the right plans in the long tern is more important to make the little profit in the short tern.
At the last but not least, I showed the advantage and disadvantage of enjoying in the chain hotel and the argument can be taken into consideration to their strategy.
After the discussion, I hope it will be helpful to resolve the problem in Hotel Glorious.

Reference List
Anon, 2013. Travel and Tourism in Switzerland. [Online] Available at: < http://www.euromonitor.com/travel-and-tourism-in-switzerland/report> [Accessed 22
September 2014].
Bernard Lambert, 2012. SWITZERLAND: ECONOMIC EXPANSION ALMOST
CAME TO A STANDSTILL IN Q4 2011. [Online] Available at: < http://perspectives.pictet.com/2012/03/02/switzerland-economic-expansion-almostcame-to-a-standstill-in-q4-2011/> [Accessed 18 September 2014].
Bernard Lambert, 2012. SWITZERLAND: ECONOMIC EXPANSION ALMOST
CAME TO A STANDSTILL IN Q4 2011. [Image online] Available at: < http://perspectives.pictet.com/2012/03/02/switzerland-economic-expansion-almostcame-to-a-standstill-in-q4-2011/> [Accessed 18 September 2014].
Brandon M. Dennis, 2013. Customer Acquisition Channels for Hotels. [Online]
Available at: < http://www.buuteeq.com/blog/hotel-customer-acquisition-channels/>
[Accessed 23 September 2014].
Brandon M. Dennis, 2013. Customer Acquisition Channels for Hotels. [Image online]
Available at: < http://www.buuteeq.com/blog/hotel-customer-acquisition-channels/>
[Accessed 23 September 2014].
Bruno Lüthi, 2014. Challenges of hospitality in the High Alps. [pdf] Alps, Andorra.
Available
at:
<
http://www.congresdeneu.ad/docs/pdf/UNWTO_mountainlikers_2014_Bruno_Luthi. pdf> [Accessed 23 September 2014].
Bruno Lüthi, 2014. Challenges of hospitality in the High Alps. [Image pdf] Alps,
Andorra.
Available at: < http://www.congresdeneu.ad/docs/pdf/UNWTO_mountainlikers_2014_Bruno_Luthi. pdf> [Accessed 23 September 2014].
Department of Swiss Tourism Federation, 2011. SWISS TOURISM IN FIGURES 2010,
STRUCTURE AND INDUSTRY DATA. [Pdf] Bern, Switzerland. Available at: < http://www.mojaszwajcaria.pl/Turystyka_w_liczbach_2010_EN.pdf> [Accessed 20
September 2014].
Department of Swiss Tourism Federation, 2011. SWISS TOURISM IN FIGURES 2010,
STRUCTURE AND INDUSTRY DATA. [Image pdf] Bern, Switzerland. Available at:
< http://www.mojaszwajcaria.pl/Turystyka_w_liczbach_2010_EN.pdf> [Accessed 20
September 2014].
Department of Swiss Tourism Federation, 2013. Swiss tourism in figures 2012,
Structure and InduStry data. [Image pdf] Bern, Switzerland. Available at: < http://www.swisstourfed.ch/files/infothek/Vademecum/2012/STiZ_2012_en.pdf >
[Accessed 22 September 2014].

Department of Swiss Tourism Federation, 2013. Swiss tourism in figures 2012,
Structure and InduStry data. [Image pdf] Bern, Switzerland. Available at: < http://www.swisstourfed.ch/files/infothek/Vademecum/2012/STiZ_2012_en.pdf >
[Accessed 22 September 2014].
EconomyWatch Content, 2010. Switzerland Economy. [Online] Available at: < http://www.economywatch.com/world_economy/switzerland> [Accessed
18
September 2014].
Gilon Miller, 2012. 10 Key Reasons Pricing Low Is Bad Business For Retailers.
[Online] Available at: [Accessed 13 September 2014].
Hannah Wickford, n.d. Hotel Franchise Disadvantages. [Online] Available at:

[Accessed 23 September 2014].
Imogen Foulkes, 2011. Strong Swiss franc 'could bring recession'. BBC News. [Online]
17 August.
Available at:
[Accessed 22 September 2014].
Katherine Vong, 2012. 3 Key Advantages of Interactive Marketing Campaigns.
[Online] Available at:
[Accessed 23 September 2014].
Michael Wolfe, n.d. The Advantages of Cost Control. [Online] Available at: < http://smallbusiness.chron.com/advantages-cost-control-22591.html> [Accessed 23
September 2014].
Perspectives Pictet, 2012. SWITZERLAND: ECONOMIC GROWTH, GDP
CONTRACTED
Q-O-Q
IN
Q2.
[Online]
Available at: [Accessed 18 September 2014].
Perspectives Pictet, 2012. SWITZERLAND: ECONOMIC GROWTH, GDP
CONTRACTED
Q-O-Q
IN
Q2.
[Image
online]
Available
at: [Accessed 18 September 2014].
Ray Bromley,, 2006. pcecon.com Class Notes. [Image Online] Available at: < http://www.raybromley.com/notes/equilchange.html> [Accessed 24 September 2014].