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Combined transport: what consequences could investment in railway infrastructure have on tourism development?
The case of the new Lötschberg base tunnelFrançois SEPPEY - Head of the Economic Development department of the Canton of Valais (Switzerland)
This year the Tourism Summits are dedicated to the issue of transport and tourism development. The large degree of interdependency between tourism potentiality and transport capacities, whether by public or individual means, requires particular attention and specific consideration. As an example of the investments currently made in Switzerland in the area of combined transport, we shall discuss the specific case of the Lötschberg base tunnel and its influence on tourism in the Valais region. It is moreover a fitting occasion to discuss this subject given that this year marks the opening of this new transalpine rail link, scheduled to open on 9 December 2007.By way of introduction, I shall explain the overall design of high-speed transport systems at European level and in Switzerland in particular.
As you can see from the diagram shown, Valais is located in the southernmost region of Switzerland, in close proximity of the site where our head office is located today. It is thus located at the centre of a triangle made up of the international metropolises of Lyon, Zurich and Milan.
Surrounded by mountains, with the highest part being the alpine arc, it is also bordered by the main high-speed rail link routes. The construction of the Lötschberg base tunnel, which forms part of a design to handle Europe’s North-South traffic, will have an impact on this situation as from 2007.
It is important however to note that the improvements made in terms of rail infrastructure are not complete. First of all, this is because the Lötschberg base tunnel will not be fully equipped with its 2 tracks, due to budgetary constraints, thereby partially reducing its capacity. Secondly, as the project falls within an integrated transport policy, it also depends on the ability of our transalpine neighbours to improve the service between Milan and Brigue via the Simplon line. To date, a significant potential improvement of this layout is yet to be realised.
The overall investment allocated by Switzerland as part of its integration into the European high-speed rail network has risen, during the acceptance of general federal projects in 1998, to 31.65 billion francs, which equates to approximately 20 billion Euros. The portion of this total allocated to the Lötschberg infrastructure is 3.22 billion francs, equating to just over 10% of the total investment. Although these figures have changed since their acceptance, due to inflation, budgetary constraints and the geological problems encountered, they allow for, on the one hand, a significant European integration effort by the Swiss Confederation (at least in terms of transport systems), and on the other hand, a small portion to be allocated towards improving access to and from Valais.
However, the anticipated development of transalpine rail traffic from now until 2020 represents an increase of around 50% in the number of passengers and a doubling of the number of tonnes transported. Falling within a more global context of the growing sensitivity towards the environmental impact of our consumption choices, this favourable development underlines the need for our mountain regions to be better integrated into sustainable transport networks that are subject to constant modernisation. In this sense, the investments currently allocated are of fundamental importance for Valais.
The market proximity, as regards the previously mentioned metropolises, and the agglomerations of Basel and Berne, an essential aspect of tourist demand, as well as the natural inclination of the Swiss population towards rail transport, are positive influential factors for tourism development in the Valais region.
Coupled with the significant time saving achieved between the German-Swiss agglomerations, the true heart of the Swiss economy, and the main Valais region resorts, these concepts predict a positive impact on tourism in the Valais region. In summary, it can be noted that access to the main native German speaking market will be reduced by almost one hour: this represents over 3 million potential clients in close proximity to Valais, it being understood that this one hour time saving forms part of an overall journey of approximately 3 hours.
In order to better illustrate the significance of this aspect, a brief overview of Valais tourism, at least in terms of the figures associated with demand, appears to be essential.
The Valais region attracts 16 million overnight tourist stays, for which the detail is now displayed. It therefore represents, along with the Grisons region, the main Swiss holiday destination. The uniqueness of the demand is that it is balanced between summer and winter and between natives and foreigners. This balance, particularly in relation to the second point, provides effective resistance against cyclical hazards.
Moreover, and an essential point as regards the transport systems, we note a significant number of day-trippers – that is, tourists that do not stay overnight in Valais. In fact, no less than 8.7 million day-trippers visit the Valais region during their holiday or leisure time. The region's proximity to the Swiss cities, combined with its wealth of tourist attractions and its incomparable natural beauty has a lot to do with this.
The resulting economic importance is highlighted by the generated turnover, which is around 3.5 billion euros, as well as the added value created in turn, which is around 1.9 billion euros. Tourism therefore contributes 25% of the cantonal gross domestic product (7.5 billion €) and has generated over 27% of jobs. In addition to the importance of the sector, this latter figure also highlights the lower than average productivity of this branch of the economy.
The modal distribution of guests – that is, people spending at least one night – in the central Valley and in the Haut-Valais regions (these being the two regions directly impacted by the opening of the Lötschberg base tunnel) shows a significant domination of individual transport means, in the region of 68%. However, the remaining 32% represents over 3 million overnight stays, a sizeable figure, which will be directly impacted by the improvements made to the rail infrastructure. The opening of the Lötschberg tunnel will therefore have an extremely significant impact on a large number of existing customers and will contribute towards improving loyalty.
In view of the importance of this new infrastructure, not only for tourism but also for the general economic development of the Valais region, a number of studies have been carried out in order to tackle the consequences.
The expected development in demand in terms of the stay looks promising. Due to the relative importance of the time saving in relation to the overall transit time, this development has more of a positive impact in the large Swiss agglomerations than in Germany. Other markets are impacted by the opening of the tunnel only marginally or not at all. Comparatively, train travel is called upon to provide a more favourable option to car travel. We can also note however a positive development for this mode of transport, owing mainly to the growing attractiveness of the destination as a whole. These figures were estimated by a group of experts, taking into account both the positive influential factors (reduction in travel time, comfort, modal distribution favouring the train) and the negative factors (awareness, loyalty of the client base towards other destinations).
The expected development will have a differentiated impact on the types of accommodation. Particular attention should be paid both to second home owners and people staying with parents or friends. This is particularly true for the summer season, owing to the longer days coupled with the shortened journey times.
Lastly, the development will have the most positive impact on the day-tripper market segment. This is a question of common sense: the saving of an average of one hour on an outbound trip is even more advantageous when it concerns a stay of relatively short duration. It is important here to anticipate rather high figures in terms of the expected development, up to 40% in some cases, which, in view of the importance of this segment as previously expressed, is intrinsically linked with the economic viability and profitability of tourism and leisure activities in the Valais region.
However, the variations in expected demand – or desired demand – will only be realised if the tourism service providers, as well as the public authorities, fulfil their roles. In this regard, it is important to highlight that the economic and tourism success initiated by the opening of the Lötschberg base tunnel, depends first and foremost on supply and not on demand. As a consequence, numerous issues must be tackled, corrected or developed.
First of all, a tourist region’s appeal is not only contingent upon its natural resources but also on its ability to market and sell them. Furthermore, these issues must be complemented by an adequate supply of «artificial» tourist attractions, i.e. those constructed and achieved by man for man. The challenge thus consists of putting structures in place that will enable this regional appeal to be developed. In this way the management of the destination, enabling the tourist offer to be professionalised, for example through the design of products or infrastructures, or the renovation of ski lifts, is essential for improving our competitive edge, which is the only way in which we can achieve an effective market presence.
Closely coupled with these structurally based developments, the improvement of our tourist infrastructure appears to be an essential condition to ensure long-term success from the opening of the Lötschberg base tunnel. It is in this way that it will be possible to match client expectations with the service offer in our resorts. This modernised infrastructure, adhering to current standards, should enable a positioning that is relative to the segmentation of our client base. Fundamental work is therefore required at all levels of the tourism economy.
The third issue associated with the tourism offer, which calls for a growing awareness on our part: the adaptation of our hosting capacities to the growing demand in day trips. As previously mentioned, this market segment will encounter the most significant progression. The assimilation of this development can only be achieved by an improvement of the hosting capacities for this segment. There is no differentiation for this sector, it involves all players, whether operating in tourist catering, entertainment, information or commerce. As with the two previous subjects, the role of the public authorities is essential, not in terms of the detailed achievement of the chosen projects, but in the establishment of suitable framework conditions to enable a co-ordinated, swift and effective development of the chosen options.
Lastly, communication is of fundamental importance. It should be a complementary part of the aspects that have yet to be explored. It is in itself the endorsement, the effective medium and acts as a support to the promotional communication established by the rail transporters. Playing on the emotional, it should convey both the time saving aspect and the image of the most beautiful tourist region in the Alps.
To this regard, a specific campaign aimed at the Swiss market has been decided upon, for which the Canton of Valais has allocated a budget of a million euros. Combined with the federal transport authority private and semi-public funds, this corresponds to over 2.5 million euros that will be invested to attract 3 million Swiss people to visit Valais. If this funding seems quite low on the scale of certain European or international counterparts, it represents a considerable amount for Switzerland. And as the saying goes: «No money, no Swiss!».
Many thanks for your attention and I will be delighted to welcome you, by car, by train, by plane or even by boat via the lake of Geneva to the Valais region, naturally...
