Switzerland's most prestigious hotels are facing a
rough ride from the economic crisis with the strong franc and declining
corporate trade expected to dent profits.

However, the
high end of the market is confident it can sweat out the tough times by
falling back on a traditional image for top class hospitality and
cashing in on the still buoyant winter season.

The
umbrella group for the luxury hotel segment, Swiss Deluxe Hotels, said
at a conference in Zurich on Thursday that bookings had reached record
levels this winter.

But while the number of wealthy Russians
visiting exclusive winter resorts such as St Moritz has not diminished,
the 38 five-star hotels still expect a difficult year in 2009 with
fewer guests and corporate events.

"The winter season is
historically very good for Switzerland as we are very well positioned.
But the summer could be a problem because of the complex and fast
moving financial crisis," Swiss Deluxe Hotels general manager Fiorenzo
Fässler told swissinfo.

"This is more of a problem for hotels situated
in towns because they have fewer repeat guests and they are faced with
companies spending less for their conferences. Our corporate clients
come from the banking, car and watch industries so we can also expect
to be affected by economic events."

Luxury shunned

Fässler added that the strengthening Swiss franc was also expected to hit guest numbers and profits next year.

"Britain
is our third most important market and the United States the fourth, so
a strong Swiss franc does not help us. The big challenge is to maintain
the record numbers of guests from these countries that we have enjoyed
over the last three years," he said.

The recent fall in demand
for luxury goods may also be an indicator that fewer people would be
prepared to fork out for expensive hotels in future, according to
Zurich Cantonal Bank analyst Patrik Schwendimann.

The global market for luxury watches, jewellery and fragrances has
dropped by around five per cent in recent months, with the dip hitting
Europe in October.

"Some wealthy people have lost money, but this
could also be a state of mind," Schwendimann told swissinfo. "Even if
you still have lots of money, you might be more careful about holding
onto it at the moment."

Bad timing

The
global economic downturn could not have come at a worse time for the
newly rebuilt Dolder Grand hotel in Zurich. The exclusive hotel was
shut for more than four years before unveiling its SFr440 million ($360
million) facelift in April.

Guest numbers have been disappointing
since the Dolder reopened its doors, but managing director Thomas
Schmid said the hotel was taking a longer term view.

"No company
can suddenly spring back into the market within a year and we have
always said that we needed three years. We certainly did not ask for a
recession, but we are confident that we can handle it," he told
swissinfo.

"We expect next year to be more difficult than we previously foresaw and we have had to change our budgets."

Schmid added that the hotel has an innovative strategy to help itself, and others, cope with the economic woes.

"We
will focus on delivering a service and an emotional product that will
make people forget about their money problems," he said.

By: swissinfo, Matthew Allen in Zurich