Zug Tourism does not expect a rapid recovery in the number of guests

Gastronomy, hotels, suppliers: they have all suffered from the effects of the pandemic. Along with Zug Tourism.

"As in all other cities in Switzerland, the Corona crisis has hit Zug Tourism with full force," says Renya Heinrich, the manager of Zug Tourism. Following the strategy that has been pursued so far, business tourism in Zug generated the bulk of overnight stays and added-value, and the subsequent slump in this sub-market and the gloomy forecasts for the coming years are all the more painful, she says. Because: "Switzerland Tourism only expects business tourism to recover no earlier than 2023 to 2024."

A large amount is missing from the revenue
Zug Tourism (ZT) quickly worked out an emergency budget last spring in order to be able to maintain the operation of the office. But, according to Renya Heinrich, the loss of revenue in 2020 is still around CHF 500,000. While the tourism region of Zug suffered, other regions in Switzerland increased revenue over-proportionally in 2020. The reason for the decline in Zug was the lack of corresponding offers and lack of awareness within this sector, she explains.

The lion's share of the overnight stays in the city and the surrounding communities are made up by business travellers. "Income from overnight stays currently differs from the budgeted amount by up to 70%, and even up to 90% over a few months. The loss at the end of 2020 was around CHF 270,000," Renya Heinrich informs. In addition, the revenue generated from the organisation of events or city tours and other activities reduced massively in 2020. Instead of the approximately CHF 190,000, only about CHF 50,000 was earned due to the effects of the Corona crisis.

A photo from better times (from the point of view of the hotels!): Chinese tourists in Zug
Photo: Werner Schelbert (Zug, 22 July 2017)

The tourism organisation has lost members and partners during the crisis
The Corona crisis has affected all those who offer or benefit from tourist services – large or small. But it’s the smaller companies who have had to tighten their belts the most. And this has gone so far that ‘they could no longer afford to pay their membership contribution to Zug Tourism, at least temporarily," says Renya Heinrich. And the lack of payments from members, as well as partnerships, has led to a corresponding loss in marketing revenue. As a result, Zug Tourism can now only fulfil the its mandate for tourist marketing of the city and the municipalities to a limited extent.

How has the government helped Zug Tourism in the crisis?
The crisis in the catering and hotel industry has also been a matter of concern to two members of the cantonal council (Kantonsrat). Rainer Leemann (FDP) and Philip C. Brunner (SVP) have asked the government council (Regierungsrat) questions about the current situation, including that at Zug Tourism (ZT). In concrete terms, they want to know how the "Government Council is helping Zug Tourism, directly and unconventionally" in the current Corona crisis. In order to assess any further need for assistance, they have also asked questions about the government's assessment of the pandemic impact on Zug Tourism, and have demanded a whole range of figures.

The two cantonal councils would also like to know whether Zug Tourism has benefited from hardship payments or other financial aid – and to what extent. In addition, the government is also expected to make a statement on whether it is prepared to compensate Zug Tourism 1-1 for the losses on overnight stays. The government should also indicate whether there are other possibilities for financial assistance in addition to the ‘hardship’ programme.

The signals are not encouraging for the current year. "The summer of 2021 offers scenarios similar to 2020, and it is now important to ensure visibility in the highly competitive market through product innovations, marketing campaigns and so on," says Renya Heinrich. Despite all the negative tendencies, she believes that a "new normal" will emerge. At this point, however, Zug Tourism must be ready to present ready-made offers.

There are glimmers of light despite the crisis. "We successfully developed and marketed the “Zug Card” within a very short time last year," explains Renya Heinrich. Those who stay in a Zug hotel can thereby use public transport free of charge, and can also benefit from further offers. Started as a pilot operation in 2020, the "Zug Card" will continue to be used this year. And, despite the crisis, Zug Tourism is also working on a new strategy. The aim is to define new strategic business areas in addition to business tourism, and to reposition ourselves in terms of tourism. As a tourist brand, Zug should be able to successfully compete with comparable destinations in urban tourism, as well as in the area of soft leisure tourism. Renya Heinrich expects to present the new strategy in the early summer of this year.