Swiss Tourism's Long Decline: Can the Alpine Giant Regain Its Global Standing?
Compared to other countries, Switzerland has steadily become less and less popular as a vacation destination, which raises important questions about the factors shaping international tourism flows. This article examines the role of demographic change, particularly ageing populations, in influencing destination rankings and looks at what these trends may imply for the future of Swiss tourism.
Switzerland's Tourism: A 70-Year Decline in Global Popularity
International travel has steadily increased over the decades. In 1950, there were 25 million international trips, rising to 1.4 billion by 2018 on the eve of the COVID-19 pandemic. This growth has made tourism a significant part of the economy. In Switzerland, for example, travel and tourism accounted for 12.5% of jobs and 9.2% of GDP in 2019. However, trends have been shifting away from Europe, and Switzerland in particular.
In 1950, Switzerland was the 5th most-visited country by international travelers; in 1990, it was the 13th most-visited country in the world; by 2018, Switzerland had fallen to the 35th position (UNWTO Barometer).
Where tourists choose to spend their holiday has a major impact on national economies. Countries in the Americas and Europe have for instance been losing ground. As figure 1 shows, fewer people are directing their international trips towards the Americas and Europe, while increasingly numbers are setting their sights on Asia and the Pacific.
Figure 1. Share of worldwide international travel (arrivals)— Source: EHL
The Role of Demographics in the Past
Destination choices depend on many factors. Income plays an obvious role, as transportation and accommodation costs can be sizable, especially in certain countries. Scholars have been looking for key decision factors for decades and have consistently found that the cost of living in the destination country and exchange rates were two other important economic factors, perhaps without much surprise. The role of historical and natural sites, of temperature, sunshine as well as snowfalls at destination has also been established. Lastly, geographical, cultural and historical proximity, domestic or international conflicts, migration and political stability undoubtedly play an important role.
Travel decisions also depend on non-economic characteristics of the person traveling. For instance, there is evidence that people go abroad less often as they get older. Health typically deteriorates with age - an important aspect to take into consideration before embarking on long-distance trips!
One related factor which hasn't been investigated much is the ageing population. For instance, one adult out of five was older than 65 in Japan in 2000. In 2020, it was one adult out of three. As populations age, does that mean that there would be less international travel if all other factors were held constant?
The answer is no. The analysis of data shows that it is quite the opposite. The ageing phenomenon is driven mostly by the increases in life expectancy, and to a smaller extent, by the drop in fertility. Living longer is, to a large extent, a by-product of medical progress that allows us to live in better health for longer. There might be an increase of the elderly in society, but this is due to better medical knowledge, meaning that people live longer and in better health, thus enabling more people to travel abroad.
The Role of Demographics in the Future
The United Nations has made projections on future fertility, mortality and migration rates, which allow researchers to estimate the expected number of old people in society. The OECD also makes projections of future economic growth. Based on these projections and the past effect of the ageing population on international travel, one can make projections of future travel between any pair of countries, ignoring all other factors that influence travel decisions. One can thus simulate future worldwide rankings simply based on changing demographics and income.
The following table compares the projections for Sweden and Switzerland, two European countries of similar ranking in 2025:
— Source: EHL
Simulations predict a different path for the two countries. On average, international arrivals in Sweden would grow by 2.2% ever year, while they would grow by 3.2% in Switzerland. Switzerland could thus maintain its worldwide position and stop the decline that has taken place since 1950. The decline is slated to, on the other hand, continue in Sweden.
Why is There Such a Difference?
The primary reason for the difference in outcomes is that the two countries attract visitors from vastly different countries. For example, twice as many people in the U.S. traveled to Switzerland (about 1 million) compared to Sweden (about 0.5 million) in 2018 just before the COVID-19 crisis. In contrast, many more travelers from Denmark visited Sweden (2.3 million) compared to Switzerland (57,000). Yet, demographic trends suggest patterns will change: Denmark's population is expected to remain stable at around 6 million, while the U.S. population, driven by higher fertility rates, is projected to grow from 350 million to 400 million by 2070. This means that the market for international travel to Sweden is likely to grow at a slower rate than the market for international travel to Switzerland.
Implications For National Tourism Management
First of all, there are many factors and thus policy actions that can be taken to influence the attractiveness of a country to international travelers. What we learn from the simulation exercise is that demographic trends in themselves will also play a role. Relative to other European countries, these trends should help Switzerland maintain its standing, without any particular policy efforts.
Secondly, tourism operators or policy makers who want to increase international arrivals into a country can also use demographic information to define their marketing targets. As there are more international departures from countries where people live longer (and thus are healthier on average), one could focus marketing resources on countries where life expectancy is higher and projected to increase faster, assuming that all other factors influencing travel decisions are the same.
While Switzerland has seen its position as a tourist destination gradually slip since the middle of the 20th century, our simulation indicates that the downtrend is expected to level off in the coming years. Population growth in its key markets, notably in the United States, is likely to continue to bolster Swiss tourism in the near future. Shifting trends, including the ageing population and the increasing popularity of Asia-Pacific, are not predicted to cause a further decline for the Swiss tourism industry.
Further Reading
We invite you to access the full simulation here or download the PDF.
For further details on worldwide travel, please consult the numerous publications from the UN World Tourism Organization.
For further details on the role of demographics and simulations, please visit the 'Long-run Economic and Demographic Influences on International Tourism' project.
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