Asked whether the coronavirus crisis had taught him that the Gstaad Palace, like many others, also needed more financial reserves in order to stay resilient, Andrea S. answers: "We've given ourselves a strong financial footing in recent years, because we know that, time and again, we're going to have to survive two or even three weaker seasons. We've always made sure that we've got a supply of ready cash and don't draw down all our bank loans. Our aim was and still is to be able to access between CHF 3 million and CHF 5 million whenever we need to."
Martin N. makes the observation that, as people from Switzerland, putting enough money aside is part our DNA. Ultimately, he says, the only reason the government was able to react very quickly with support measures was because there was a financial cushion in place. He thinks that most people's personal finances are somewhat more robust than in other countries, where having to live from one pay cheque to the next is fairly common, and that this behaviour is rewarded in times of crisis. Andrea S. argues that, in the US for example - the world's biggest economy - the 'hand-to-mouth' mentality is much more pronounced, creating a distinct borrowing culture and, in this case, eroding resilience. "I'd venture to suggest - or even I fear - that the next crisis will erupt in the US given its huge debt burden."
PROFILE OF ANDREA SCHERZHolds a degree in hotel management from the EHL Hospitality Business & Hotel Management School in Lausanne and has completed an advanced studies programme in hotel management at a professional education institution Gained hotel management experience in leading establishments such as the Beau-Rivage in Lausanne, The Savoy in London and the InterContinental in Geneva as well as hotels in the US and Italy Since 2001, majority shareholder and CEO of the Gstaad Palace From 2004 to 2013, Member of the Management Board and Deputy Chairman of Gstaad Saanenland Tourismus From 2007 to 2023, Member of the Board of Directors of Swiss Deluxe Hotels Since 2022, Chairman of the Executive Committee of Leading Hotels of the World
However, Hansruedi M. believes that the tourism industry paints a very mixed picture as far as financial security is concerned. Take hospitality, for instance: the pandemic showed us how little it takes for the reserves to be used up, he says. "The Swiss restaurant industry has been in crisis for some years now, and not just because of a lack of rainy-day savings", Andrea S. adds. He identifies the shift in consumer behaviour as having much to do with this and predicts the demise of the simple country pubs known as Landbeizen. "Whenever I scout out a course for our rally event, there are always some beautiful old inns along the route, but many of them are closed."
But Martin N. sees things differently. Rather than a lack of resilience in many cases, he argues that the main reason behind this trend is that too many restaurants have simply failed to keep up with the times. Hansruedi M. adds: "If resilience essentially means adapting continually to changing circumstances - including new consumer habits - then this is precisely what many restaurants have sat back and failed to do."
Andrea S. found his experiences during the second wave of the pandemic to be highly valuable. "We decided to be proactive in communicating what the current situation was. Our guests liked that. They realised that here, 'under the shelter of the old oak tree', everything was being done to let them feel safe, and they trusted us. Honest communication is key."
Lessons from the pandemic - tweaking your risk management
What lessons can we learn from our experience of the pandemic - tweaks to our risk management, new safety or hygiene measures, changes to market cultivation, other kinds of partnership, a rethink of our financial management, all leading to increased resilience? Andrea S. openly admits that his risk management had to be adjusted because the threat of a pandemic had simply not been considered. "If we're honest, though, we're rarely able to gauge the impact of potential risks correctly or specifically enough."
"Honest communication is key."
"We're rarely able to gauge the impact of potential risks correctly or specifically enough."
This assessment leads Martin N. to ask whether one would thus have to conclude that the risk analyses that have become so popular are actually of little use. After all, he says, if you were aware of the risks and able to respond to them, then running such an analysis would clearly be merely going through the motions. Andrea S. is more circumspect: "I wouldn't go as far as that; anticipating potential risks is definitely a good thing." He adds that the risk that would have the most consequences for the Gstaad Palace is if something happened to him personally as its majority shareholder and CEO. There is not much that can be done to counter that, he points out - after all, he cannot simply be cloned. However, he continues, there needs to be an answer to the question of who would take on the running of the hotel in such an emergency situation or whether it would have to be sold. He believes that it is important to build a strong team that could manage operations for a long time even without the CEO. "Admittedly, though, risk analyses are often 'sandbox exercises' that don't actually lead us to change anything."
"During the pandemic, we drew up a contingency plan and acted out a range of scenarios", Andrea S. says. "We discussed who would do what and identified who exactly would need to take on more responsibility if managers caught COVID-19 and had to isolate, or how we'd feed staff who couldn't leave their rooms. We had to be really flexible, react quickly and find creative solutions." As far as resilience goes, he has one golden rule, which he has followed since before the pandemic even struck: "Apart from the Swiss, we never allow an individual market to make up more than 10 per cent of our guests." Setting a maximum of 10 per cent per country of origin is a major resilience factor, Hansruedi M. thinks. He also believes that not having one single group of guests dominating proceedings is good for maintaining harmony amongst them.
"Setting a maximum of 10 per cent per country of origin is a major resilience factor."
"We put a lot of work into cultivating the Swiss market during the pandemic and had a good degree of success", Andrea S. observes. "We were pleasantly surprised and got a lot of positive feedback. Securing the Swiss market was one of the things we learnt from the pandemic." Martin N. also recognises the stabilising effect of the domestic market: "That made us resilient during the crisis, first in the mountains and rural areas, then later on in the towns and cities too." He says that Switzerland Tourism was one of the few national tourism organisations (NTOs) that did not close any of its offices abroad or make any of its staff redundant during the pandemic, adding that the Swiss government's recovery funds had permitted countercyclical crisis management. This allowed the organisation to maintain its presence, retain its expertise and be ready to start working again quickly when the time came.
Andrea S. adds: "Keeping our staff allowed us to maintain the same level of quality and resourcefulness." It was this that led to the Gstaad Palace's exciting new partnership with Ferrari, he reveals, because all the exhibition centres and showrooms were closed. Two new models were parked in a prominent position in front of the main entrance, ready for guests to take them for a test drive. "That was a huge success. Unfortunately, the limited run sold out within no time at all." However, he reveals, there is already interest from other car brands looking to launch a new model, suggesting that the pandemic has also given birth to new ideas.
Martin N. feels that the umbrella organisations for the tourism industry worked extremely well together at the national level during the pandemic and achieved a great deal through their joint efforts, prompting the question of whether the crisis brought service providers closer together on a local level too. Andrea S. confirms that this fantastic spirit of cooperation amongst the national umbrella organisations was palpable, and that the level of political and financial support achieved at this critical time had been a godsend. In terms of individual destinations, he says, people in the Saanenland area have a long tradition of being very willing to work together: ultimately, responsibility is not something that you can outsource. "I usually manage to find my own solutions to the task at hand during a crisis."
Martin N. asks whether the pandemic also brought the tourism industry and the general public closer together. Hansruedi M. opines: "It's widely known that people's opinion of the tourism industry is low when it's in good shape and begins to rise again when holidaymaker numbers fall." The interdependency is much more evident in hard times than...
