How did SNB exchange rate interventions impact Hotel performance in Switzerland?

The tourism industry is one of the pillars of the Swiss economy. During the last decade, political and economic instability all over the world have reinforced the “safe heaven” status of Switzerland, which resulted in a stronger Swiss franc. In order to protect export-oriented sectors, the Swiss National Bank (SNB) introduced an exchange rate floor between September 2011 and January 2015, aimed at limiting currency appreciations. The goal of this paper is twofold: First, we would like to understand the relationship between the exchange rate and the performance of hotels classified by class; second, we analyze how the SNB intervention on the exchange rate market affected the industry. The findings of this study indicate that hoteliers react to exchange rate appreciations and the reaction appears to be stronger in economy and midscale classes, rather than in upper classes. Exchange rate appreciations negatively affect occupancy only in the case of luxury hotels