Alpine tourism is undergoing radical change. Guests no longer want traditional hotel structures, but are looking for individual concepts with more space, flexibility and privacy, says tourism and hospitality expert Orlando Steiner. Nevertheless, he does not see the growing serviced apartment segment in the Alps as ‘direct competition for the hotel industry’. A media report by Hotel Inside on the relevance of serviced apartments in the Alpine region.
Orlando Steiner, project manager and consultant at the renowned tourism consulting firm Quant (Flims), has written a white paper entitled ‘Are serviced apartments the solution for the holiday hotel industry in the Swiss Alps?’ Steiner, a graduate of a graduate of the Lucerne Hotel Management School (SHL)
and a revenue and finance expert with many years of experience (including at Marriott Hotels), he is convinced that serviced apartments, which are experiencing strong growth, particularly in cities such as Zurich, London and Geneva, also have considerable potential in the Alpine region.
Orlando Steiner says: “The pandemic has further increased the need for places of retreat. Many people want places where they can plan their holidays independently.
These locations should offer the following in particular:
- Individuality and flexibility
- Nature experiences and active recreation
- More space and privacy
One driver of this development is the 2012 second home initiative, which severely restricted the construction of traditional second homes, explains Steiner.
‘This means that there is a shortage of holiday properties on the market. Serviced apartments fill this gap, as they combine tourist use with owner interests.’ According to Orlando Steiner, this brings advantages such as:
- New opportunities despite regulation
- Tourist use remains possible
- Attractiveness for international investors
Hotel Inside journalist Hans R. Amrein spoke with Orlando Steiner about the opportunities and risks of serviced apartments in the mountains and asked: Will traditional hotels in the Alpine region come under pressure if serviced apartments become widespread?
What are Serviced Apartments?
According to Orlando Steiner, serviced apartments combine the independence of a holiday apartment with hotel comfort. Guests enjoy more space, often with living, sleeping and dining areas, a kitchen and a balcony or terrace. They are considered an attractive alternative, especially in mountain regions. Typical features include:
- Living and dining areas instead of just hotel rooms
- Self-catering options
- Cost-effectiveness due to lower fixed costs
- Flexible hotel services
As exciting as the model is, it is subject to strict rules. Serviced apartments are usually considered hotel-like establishments. Owners are only allowed to use their apartments themselves to a limited extent during the high season; the rest of the year is reserved for tourist rentals. This results in requirements such as a maximum of three weeks of personal use per season, an obligation to rent to tourists or proof of long-term profitability, as well as compliance with hotel standards.
Financing and profitability
The ‘buy to use and let’ model is widespread: owners purchase an apartment, use it themselves and otherwise have it professionally rented out. This generates income that covers costs or even enables returns. Unlike traditional second homes, serviced apartments are also accessible to international investors. In this context, the following aspects must be taken into account:
- Attractive room rates and good occupancy rates
- Efficient room layout with as little unrentable space as possible
- Clear business planning
Key success factors
In order for serviced apartment projects to be successful in the long term, key success factors must be taken into account. Particularly important are aspects such as defining target groups and a clear strategy, as well as unique positioning and a well-thought-out space allocation plan. Other factors include architecture and stakeholder management, business excellence and legally clear structures.
Architecture is the key to success. It should blend in harmoniously, be sustainable and create spaces that appeal emotionally. At the same time, close cooperation with communities, authorities and local partners is essential for the successful implementation of projects. The following should be taken into account:
- Sustainable materials and regional building culture
- Early involvement of all stakeholders
- Clear communication to secure approvals
Conclusion
Serviced apartments are a promising solution for the Alpine region. They offer guests space, freedom and comfort and create profitable prospects for investors. However, success depends heavily on a clear strategy, careful planning and professional operation. ‘Only those who do their homework will be successful – in design, financing, implementation and operation,’ says Orlando Steiner.
Source: Hotel Inside, Author: Hans R. Amrein
