Swiss travel agents and retailers cut prices
Malcolm Curtis · 19 Jan 2015, 23:05
Published: 19 Jan 2015 23:05 GMT+01:00
- Tourism industry reeling from soaring franc (18 Jan 15)
- Shock move to untether franc sparks debate (16 Jan 15)
- Soaring franc causes queues at FX counters (16 Jan 15)
- Markets panic as Swiss scrap euro rate cap (15 Jan 15)
Kuoni Switzerland and Hotelplan, run by retail giant Migros, both announced plans on Monday to chop their prices for many destinations.
Kuoni said it expects to cut seaside holidays in the Mediterranean by 15 percent, while Hotelplan is slashing some of its offers by as much as 20 percent.
The deals come after the Swiss National Bank last week abandoned its support for a euro floor of 1.20 francs.
Currency traders immediately bid up the franc, which on Monday was continuing to trade around parity with the euro.
The stronger franc, which has also risen against the US dollar, has made imports to Switzerland cheaper.
A day after the central bank’s announcement, travel companies TUI Suisse and the online firm bookers.ch advertised reduced rates to reflect the currency change.
Other Swiss businesses have also announced lower prices for imported goods, particularly from the European Union.
While the strong franc is hurting Swiss exporters, domestic consumers stand to benefit.
Supermarket chains such as Coop have announced lower prices for produce, such as lettuce, vegetables and fruit.
Reductions are expected for imported wine and beer, as well as meat and fish from outside the country.
Furniture chain Pfister said it has already reduced prices for furniture sourced from the eurozone, the Blick newspaper reported.
The drop in the dollar, meanwhile, means lower costs for fuel at the pumps for Swiss motorists.
Car prices are also expected to fall, given that virtually all automobiles are imported into the country, mostly from the eurozone.
Swiss motorists are known for liking German cars, which have suddenly become cheaper — at least on paper — because of the weak euro.
But Morten Hannesbo, CEO of car importer AMAG, warned in an interview with SonntagsBlick against unrealistic expectations.
The real level of the “euro shock” will only be known once exchange rates have stabilized, he indicated.