Refundable holiday flats: What’s behind the boom in managed flats?

It was smart marketing for the owner of the Hard Rock Hotel Davos to announce a real estate project during WEF week: IHS Group will build and sell 17 serviced apartments. A few years ago the company had already created 15 such accommodations. Now a hotel adjacent to the area needs to make room for the new building.

There are few options for creating new holiday apartments from scratch in Davos. The law imposes a 20 percent cap on second homes, and that cap has already been reached in the town of WEF. But there is a loophole: Tourist-run apartments are supposedly exempt from Lex Weber.

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This exemption is an important reason why serviced apartments, i.e. apartments used by tourists, are becoming increasingly popular in the mountains. The project in Davos joins a long list: Laax, St. Serviced apartments are planned or recently built in many of Switzerland’s top destinations, such as St. Moritz, Saas-Fee or Crans-Montana.

Serviced apartments are often attached to a hotel. It is a hybrid between a hotel room and a classic holiday apartment. Owners can use the hotel’s services and the apartment themselves – but only for a limited time per year. For the rest of the year, the hotel rents out the property.

Source of financing for hotels

Newly managed apartment buildings are also being built in San Bernardino: Ticino real estate entrepreneur Stefano Artioli is creating a new resort here. The business plan calls for hundreds of apartments. Or Arosa: there the Posthotel was converted into a thirty-suite residence. The extra of the project is ice hockey legend Arno del Curto.

Statistics from Hotelleriesuisse underline this trend: 55 companies in Switzerland now offer serviced apartments, two-thirds of which are in tourist destinations. Hotels have discovered this concept as an easy source of financing. “You can use part of your rooms or space for serviced apartments and sell them,” says Jürg Stettler, a tourism expert at the Lucerne University of Applied Sciences. An attractive package: Hotels do not only receive capital when selling flats. They also make money later because they get a portion of the rent and also accept paying guests.

“Such apartments are an opportunity to invest in an apartment in the mountains at a relatively attractive price,” says UBS real estate expert Maciej Skoczek. “Market prices for classic, quality second homes tend to be higher in some holiday destinations.”

He emphasizes that an expertly managed holiday home is not a substitute for a classic holiday home. “You may only use the property to a limited extent and may not install it yourself.” As the two examples show, conditions vary greatly depending on the project. Usage at Hard Rock Hotel Davos is limited to eight weeks, three weeks of which are during the peak winter and summer seasons. St. For those planning a residence in St. Moritz, Hotel Laudinella offers three weeks from Christmas until the end of February. Outside of this period, property owners can occupy the flat as they wish.

The concept carries risks

Apart from the restrictions, serviced apartments also offer advantages: Marika Zanoletti, sales manager for apartments at the Hard Rock Hotel Davos, speaks of a “hassle-free package”: “Normal holiday apartments are often empty, causing a lot of holiday effort.” The owners felt pressured to spend time there. “With a serviced apartment, these disadvantages can be avoided and profits can be made.”

However, there is no guarantee that this income will always flow. St. “If there are no guests in a tourism destination or project, then the serviced apartments will ultimately be empty,” says Christian Laesser, who studies tourism at the University of St. Gallen. The operator of the apartments may also file for bankruptcy – this unpleasant scenario also needs to be taken into account.

In the case of the Hard Rock Hotel Davos, it seems that those involved are not deterred by these risks: 4 of the 17 apartments have already been booked. Buyers are also likely counting on a successful future for the World Economic Forum (WEF), which brings huge revenues to the local real estate market. But some property owners seem concerned about this excess income: According to the hotel, the owners of previously built serviced apartments include people who use the apartment themselves during WEF.