Back to top

Swiss agencies report "difficult year" due to currency flux

Global currency fluctuations and an ageing population made 2015 a difficult year for Swiss agencies. English continued to be the most sought after language, but the Swiss Association of Language Travel Agents said turnover was down.
March 15 2016
2 Min Read

Global currency fluctuations and an ageing population made 2015 a difficult year for Swiss agencies. English continued to be the most sought after language, followed by French and Spanish, but the Swiss Association of Language Travel Agents said turnover was down.

While currencies strengthened in top destination countries, students opted for shorter stays in cheaper locations. Meanwhile, the Swiss government unpegged its currency from the euro in January last year, causing the franc’s value to soar. Swiss agencies lost a reported 10-15% in revenue overall as a result.

English language courses accounted for 66% of the estimated 45,000 Swiss students studying languages abroad last year. French course demand surpassed other languages for the second year in a row, making up 16% of total numbers, compared to 7% from the third most popular language, Spanish.

Countries where currency valuations increased, like the US and the UK, lost ground to more affordable destinations

Countries where currency valuations increased, like the US and the UK, lost ground to more affordable destinations in Europe, including Ireland and Malta, and further afield in Australia according to SALTA’s annual report on students sent during the 2015 calendar year.

“There’s more price sensitivity here than five years ago,” commented Claudio Cesarano, president of SALTA, which represents seven member agencies accounting for 85% of the country’s study abroad market. “We’ve traditionally been a self-funded market, and people are starting to think about how they invest their money.”

The market has also traditionally catered to younger adults (18-26 years old) and the junior market (12-16 years old), however shifting demographics mean there are more bookings in the 30+ market and 50+ than in previous trading years.

“I’d say in the next five to 10 years we’ll have difficulty getting the same numbers [of juniors] as we have in the last three years,” he said.

Older students study for shorter periods of time, can only go abroad at certain times of year and prefer individual accommodation to homestay, said Cesarano.

SALTA survey results show host family accommodation accounted for just 66% of bookings this year while residences made up 26% and hotels 4%.

“The 30+ market is growing and affecting overall accommodation percentages,” he said. “Those people want their individuality, which we have never had in Switzerland before. Usually it’s 80% homestay and 20% residences.”

“The market in Switzerland is shrinking. I think there will be consolidation because there are too many big agencies”

Overall, Cesarano said while numbers didn’t diminish, student weeks fell making trading difficult in 2015. “We had a really really hard year in terms of turnover. We saw at least a 10-15% drop in revenue. Some members did better but that’s because they had a bad 2014.”

With economic forecasts for the eurozone expected to downgrade, Cesarano said he anticipates 2016 will be equally as challenging.

“The market in Switzerland is shrinking. I think there will be consolidation because there are too many big agencies,” he commented. “2016 will be difficult, and there will be more last minutes bookings because of the shorter stays.”

He added that the appearance of incentives like offering laptops, discounts and 2-for-1 deals add to the market’s risks.

“It’s good in down seasons for example, but if you have a special all year round it’s not special,” he said. “Students get used to a certain thing if you do that and that’s a danger for us all.”

0
Comments
Add Your Opinion
Show Response
Leave Your Comment

Your email address will not be published. Required fields are marked *