July 5 (Reuters) – Swiss retail sales posted a strong rise in May, reflecting a healthy recovery in private consumption but European tourists spent fewer nights in Swiss hotels as the strong franc priced some out of the market.

Retail sales rose 3.8 percent in May in real terms versus the year-earlier month and were 1.3 percent higher compared to the previous month when adjusted for seasonal effects, the Federal Statistics Office said on Monday. [ID:nZAT010921]

“Consumption has been positive over the last couple of quarters and the numbers reflect a positive trend,” Credit Suisse analyst Fabian Heller said.

“We think consumption remains a driver of growth, especially given the improvement on the labour market,” he said, adding that demand from Europe was one of the drivers of the recovery.

The recent sharp rise of the Swiss franc against the euro, weakened by the European debt crisis, has triggered concerns for the Swiss export industry and data published by the Federal Statistical Office suggested hoteliers have also been affected.

While overnight stays in Swiss hotels increased 3.2 percent in May compared to the same month in 2009, driven by Asian tourists, the number of nights spent by visitors from Europe fell 0.5 percent.

A 10 percent rise in the franc versus the single currency this year has increased further the cost of a holiday in Switzerland, commonly regarded as an expensive destination, for visitors from the euro zone.

The number of nights Italians spent in Swiss hotels declined by almost 10 percent in May and Germans also spent fewer nights.

The Swiss National Bank dropped its pledge to fight an excessive appreciation of the Swiss franc versus the euro at its policy meeting in June and its directors have said that deflationary risks are fading.

But SNB chairman Philipp Hildebrand said the SNB was keeping a close eye on the Swiss currency’s volatility in an interview published on Sunday. [ID:nLDE66309R] (Reporting by Silke Koltrowitz and Sven Egenter, editing by Mike Peacock)