Overall, the proportion of overnight hotel stays by foreigners declined 3.5 percent, the statistics office said on Tuesday. Stays by guests from the United Kingdom eased 8.3 percent and fell 6.2 percent among Italians. They sank 14 percent for travellers for the Netherlands.

Hoteliers and restaurateurs are among those suffering most due to the unfavourable exchange rate, and the bleak state of the euro zone economy has discouraged people from taking expensive holidays.

Despite the Swiss National Bank's cap of 1.20 per euro, put in place on September 6, the safe-haven franc is still nearly 30 percent stronger than it was before the financial crisis erupted in 2008.

More tourists from Asia helped to compensate a bit for the loss of European vacationers: hotel stays by Chinese guests rocketed 47 percent, while those by Indians rose 17 percent and South Koreans gained 24 percent.

Some hotel and restaurant sector workers demonstrated in front of the central bank building in Berne this week urging the Swiss National Bank to move the cap to 1.40 per euro.

The SNB has said it may take further measures if economic conditions make them necessary but it will not bow to political pressure.

The decline in overnight hotel stays for Swiss guests was only 0.1 percent last year .

(Reporting by Catherine Bosley; editing by Stephen Nisbet)

• A Permanent Economic Emergency