By John Revill

ZURICH (Reuters) – Switzerland’s tourism industry is unlikely to recover fully from the economic fallout from the new coronavirus until 2022 as tough restrictions on public life and travel take a toll on its Alpine resorts and city hotels, the government said on Monday.

Loved by holiday makers for its snow-capped mountains and Alpine valleys and by business travelers for its cities, Switzerland has been battered as the COVID-19 disease keeps people away.

Demand at resorts, restaurants, hotels and mountain trains is down 80 to 95% compared with a year earlier, said Erik Jakob from the State Secretariat for Economic Affairs.

“Demand has absolutely collapsed,” Jakob told a news conference in Bern. “From business travel to holiday makers, the mountain regions to the cities, the whole spectrum of tourism has been hit.

“We believe that tourism will be hesitant in 2020 and there will be a gradual recovery in 2021,” he said. “A complete normalisation of demand and sales will not happen until 2022.”

Border closures have stopped visitors from abroad, while domestic travel has been severely curtailed by month-long curbs.

The government has appealed to Swiss to stay home so not to add to the burden on emergency services fighting the outbreak.

Tourism employs around 260,000 people and is one of the country’s biggest export industries, with sales equivalent to roughly 7% of gross domestic product.

The sector has been a big user of the short-time working scheme — where the government pays part of the wages of workers on reduced hours — and also emergency loans to stay afloat.

It has applied to the government for 40 million Swiss francs ($41.4 million) to launch a marketing campaign to lure tourists back after the crisis ends.

“It will be a worldwide battle to attract tourists after the virus, but we have to do something otherwise the industry will be devastated,” said Markus Berger, spokesman for Switzerland Tourism.

“The problem is our companies have used up their money to get through the crisis and don’t have any money for marketing.”

The government last week announced a gradual end to its restrictions, starting with beauty salons and hair dressers on April 27, but many in the tourist industry are confused about when and how they can reopen.

The process of re-opening will be gradual despite a slowdown in the infection rate, which has reached 27,944 cases with 1,142 deaths.

“We are still in a situation where we are trying to master the situation. It is not over,” Health Minister Alain Berset told a separate news conference in Grisons canton.

(Reporting by John Revill, additional reporting by Michael Shields)