Zermatt Switzerland - When Will Southwell, owner of Chalet Bergheim in Zermatt, checked his e-mail, he found the Swiss ski resort had reacted quickly to the central bank's (SNB) decision to scrap its currency cap with the euro.
 
As the Swiss franc strengthened some 20 percent against the euro and the pound, Zermatt's tourist office suggested four options to the hotels, chalets, restaurants and cable-car firms that comprise its 1,100 members:  reinstate the 1.20 franc per euro cap for European visitors, offer discounts of 20 percent, cut prices by 10 percent, or take no action.
 
"I'm considering holding our prices in euros for a while," said Southwell, who works for a consultancy in Zurich and rents out his century-old wooden chalet overlooking the Matterhorn for as much as CH7,600 ($10,013) a week during peak season.
 
"The bank's move was a huge shock and impacts everyone."
 
Zermatt, voted the Alps' best resort last year in a survey of 48,000 skiers by mountain-management.com and the University of Innsbruck, isn't used to offering cut-price holidays to lure visitors to its 360 kilometers (224 miles) of pistes that climb as high as 12,739 feet (3,883 meters).
 
While that altitude provides a cushion against this season's mild winter, the Swiss National Bank's surprise decision compounds the woes that came after the ruble's decline deterred some Russian visitors.
 
Shock Waves
 
The SNB sent shock waves through currency and equity markets on 15 Jan 2015 by announcing it was abandoning its three-year-old cap of 1.20 per euro on the franc.
 
The move presents "major challenges to the Swiss economy and in particular to the export and tourism industries," according to the Swiss government.
 
"I come here every year and we will now probably need to reconsider the length of our stays," Russell Hahn, 56, a corporate banker from Rhode Island, said by phone from the Hotel Alex in Zermatt.
 
"The other people in the hotel are saying they will drink less wine, eat out less, or cut one day of skiing."
 
Hahn said Italy may now be a better option than Switzerland for a lake holiday this summer, adding that British guests in his hotel are saying they will start going to Austrian resorts.
 
More than 42 percent of overnight visitors to Zermatt come in summer.
 
More Expensive
 
"People are asking if we can adapt the currency rate," said Isabelle Schenk, deputy director of the Omnia, a boutique hotel where the cheapest room is 500 francs a night.
 
"We have to tell them "we can't be responsible for national economic policy. It's really bad for hospitality and for Switzerland."
 
So far, there haven't been any cancellations, according to Schenk, who said the hotel would be discussing the alternatives after receiving the e-mail from the tourist office.
 
"This is a question to members of Zermatt tourism to find out what kind of measures they would like to have considered," said Edith Zweifel, a spokeswoman for the office, who declined to comment further on the e-mail sent to its members.
 
"The first reaction was shock because tourism is part of the export business in Switzerland and it makes staying in Zermatt considerably more expensive."
 
The franc soared as much as 41 percent versus the euro, while climbing more than 15 percent against all of the more than 150 currencies tracked by Bloomberg after the SNB scrapped its three-year-old policy of capping its currency against the euro.
 
Long History
 
About a third of visitors to Zermatt are Swiss, with a slightly smaller number from euro-area nations.
 
British visitors ranked third, accounting for 7.5 percent of the 2.07 million overnight stays in the 2013/2014 season, according to the figures from the tourist office.
 
The British link with Zermatt dates back to 1865, when Edward Whymper made the first ascent of the Matterhorn with a Swiss guide, Peter Taugwalder.
 
Four companions who also summited fell to their deaths on the descent, including Lord Francis Douglas whose body was never found.
 
"British guests and families have been coming for generations," said Zweifel.
 
"We hope they don't forget us and still decide to come to Zermatt."
 
British tour operator Inghams, which features 13 Swiss ski resorts, including Zermatt, Verbier, St. Moritz, Klosters, Davos, and Wengen, offered some encouragement last Friday, saying it was keeping its Swiss rates unchanged in the short term.
 
Freezing Rates
 
"We can confirm today that we are freezing our current winter season basic holiday prices for Switzerland at the old, significantly better exchange rates, saving guests approximately 18 percent off all their accommodation and transfer costs," Inghams said in an e-mailed statement.
 
Travelers who book their summer holidays in Switzerland before the end of February will also pay pre-15 Jan 2015 prices, Inghams said.
 
After that, the company's pre-purchased funds will run out and prices will be adjusted, it said.
 
While Zermatt Tourism said that some of its members are reporting a small number of cancellations, lower-altitude Swiss ski resorts in Valais and other Swiss cantons may struggle.
 
Wrong Strategy
 
"We are very concerned by this news, there is a direct correlation between the exchange rate and tourism," Bruno Huggler, director of the Valais Tourism board said 15 Jan 2015 by phone.
 
"Holidays have become more expensive, and there will be a direct impact on bookings."
 
Bergbahnen Engelberg-Truebsee-Titlis AG, one of the largest Swiss mountain-railway operators, has fallen 14 percent in Zurich trading since the SNB's announcement.
 
Titlis, which serves about 1 million customers a year through its cable car, restaurants, hotels, and apartments, expects to lose some of its European clients, but is waiting to see the full impact, according to Marketing Director Peter Rainle.
 
"Lowering the prices would be the wrong strategy because we have already done all the calculations for this year," said Rainle, who was up in the mountains when the news broke.
 
"We were a bit shocked, but now we realize we need to take on this challenge."
 
Shares of Jungfraubahn Holding AG, which carries passengers through the north face of the Eiger mountain to Europe's highest railway station, fell 8.8 percent in the final two trading sessions of last week.
 
Quality Competition
 
"We will not try to compete on price but on quality," according to Patrizia Bickel, spokeswoman for Jungfraubahn, who said it's important for planning purposes that the currency stabilizes.
 
"Our marketing effort will be intensified outside Europe."
 
Resorts in neighboring France, Austria, and Italy are positioned to take advantage of skiers shunning higher prices in Switzerland.
 
For La Clusaz in the French Haute-Savoie, the franc's surge couldn't have come at a better time.
 
The ski station sits at 1,100 meters and had only 60 percent of its runs open as of Friday because of a lack of snow, the worst it's been in 20 years, according to Director of Tourism Alexis Bongard.
 
The dual French and Swiss citizen said he feels bad for his friends in Switzerland, but for now their loss is La Clusaz's gain.
 
France Advantage
 
"It's good news for us," he said in a telephone interview from the French town.
 
"We were already cheaper in terms of lift tickets and accommodation and now we've become even more attractive."
 
With the franc trading almost at parity with the euro, the difference is marked.
 
A six-day lift pass for Zermatt, including piste links to the Italian resort of Cervinia, is 434 francs, according to the resort's website, compared with 188 euros for La Clusaz.
 
For now, Zermatt is stressing the quality of its holiday experience, with big slopes, glacier skiing, fine dining, a car-free village, and the iconic Matterhorn, according to the tourism office.
 
"We book five months in advance, so the key will be what happens next winter?" said Southwell, whose piste-side chalet uses a helicopter to deliver guests' luggage.
 
"Zermatt won't suffer as much as the smaller resorts because the type of guests we attract aren't so price sensitive."
 
Dylan Griffiths, Roxana Zega, and Hugo Miller.