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3 Reasons to invest in Switzerland

Switzerland is definitely a master player when it comes to Economy Switzerland has become a preferred destination for investors due to its taxation system

Switzerland has become a preferred destination for investors due to its taxation system, geographic and political position, low inflation, highly skilled professionals as well as its competitive business environment. The economic stability of Switzerland is one of the most known facts about this country.

Switzerland is an attractive business center for the multinational companies, due to its business model, that aims to provide the ideal framework for the foreign investors. As a result of this, about 30% of the world’s biggest brands have offices in this country. In fact, 15 Fortune 500 Companies such as Glencore International, Nestle, Novartis, Roche Group or ABB have the headquarters in Switzerland.

The political neutrality of Switzerlandand and its geographic position

Though Switzerland has never joined the North Atlantic Treaty Organization nor the European Union, it often acts as a mediator between countries on international political matters. Although it is not a member of the European Union, Switzerland is a member of the European Free Trade Association and also a member of the Schengen Area from 2008.  In order to prevent double taxation for the same item, Switzerland has signed Double Taxation Agreements with 55 countries so far. Switzerland has also agreed and signed 10 tax information exchange agreements.

Switzerland’s geographic position, in center of Europe, can be viewed also as an advantage by the investors who are interested in investing their assets in this country. Due to its infrastructure, Switzerland is considered an accessible country, with car access to more than 30 European countries. In fact, according to the Global Competitiveness Report from 2016-2017, Switzerland is the most competitive country in Europe and as competitive as Singapore and United States at a world-wide level.

Highly skilled professionals

The high level of education and skills makes Switzerland a country in which the foreign companies would want to invest in. The literacy rate in Switzerland is 99%, which makes this country the 6thmost literate in the world. As a result, many well-known foreign companies choose to relocate their offices and in some cases, also their employees to Switzerland. Over 22.7% of the population living in Switzerland do not have a Swiss passport.

Switzerland is focusing on having one of the best educational systems and having human resources as an alternative for its scarce natural resources. As such, ETH Zurich University is ranked as one of the best in the world and a leading university from the European continent.

The taxation system

Currently, in Switzerland there are approximately 6500 foreign investors that contribute to Switzerland GDP with more than 5 billion dollars yearly. Moreover these companies provide permanent jobs for almost 15000 Swiss citizens.

This is why the Swiss Government is interested in maintaining its tax status by creating a tax reform that will allow even more investors in the future, but will align in the same time with the international regulations.

The Swiss law considers that the cantonal tax rate laws should have sovereignty over the federal ones. In such, in order to attract investors, Switzerland has provided the possibility for each canton to have its own tax breaks for the investment projects. Some of the lowest taxes rates are on Zug, Schwyz, Slon and Stans and start from 1.78%, while the highest are on Lausanne, Basel, Solothum, Neuchatel up to 9.96% (for a couple with two children).

Due to all above mentioned, Switzerland will remain the best investment destination for foreign investors interested in having a safe growth of their assets over the years.

For more details and assistance about investing in Hotel Real Estate in Switzerland, feel free to reach out to our expert consultants. Our highly experienced and well-informed team is ready to answer all your questions and give you all the help you might need.

in Consulting Services Posted by Alpinea

Hotels vs Airbnb

An Interesting Battle Is everyone having a love affair with Airbnb? This “a place for a good deal” company is a rapidly growing big deal in the travel industry and is the biggest competition to the hotel industry.

Is everyone having a love affair with Airbnb? This “a place for a good deal” company is a rapidly growing big deal in the travel industry and is the biggest competition to the hotel industry. Given a choice between a hotel stay and an Airbnb home, the majority of people would pick a hotel every time. From the beginning, hotels are built around the visitor. From interior design to facilities and services. Airbnb’s are often adapted from private homes. At the beginning of the Airbnb phenomenon, why did people prefer to pick a hotel stay versus Airbnb accommodation? In a word, services. Services guarantee tourists and any business traveler a pleasant stay without any muss and fuss.

What is an Airbnb? Basically, it is another form of a hotel, but it’s most likely someone’s own home or their own apartment (given out for rentals).

However, when it comes down to an Airbnb vs. Hotel, more and more people opt nowadays for an Airbnb, because it’s cheaper and offers more flexibility. Airbnb’s tend to cost less than hotels while offering more space and flexible check-ins and check-outs. The basic cost saving factor is just one of many reasons why Airbnb’s are getting trendier than hotels. There are many reasons why Airbnb is better than a hotel. But is this true? Will hotels be out or is there a healthy balance between the two?

Let’s look at Airbnb facts:

  • Airbnb’s often offer a kitchen and therefore the option to eat in. This means customers have to go grocery shopping. So, from one side, this is much cheaper than being forced to go to restaurants all the time and dining out. It also gives the client the chance to experience the shopping aspect of the local life, and go to delicious local markets.
  • By staying in an Airbnb, you get an idea of the local lifestyle. The feeling of living in “your own flat” inspires you to become more like the locals.
  • The Airbnb host can provide local tips.
  • Big family or friend groups can stay in Airbnb’s, which means that there is no need for extra rooms as you would need it, in case a group would want to travel together. Again, this attractive cost saving option attracts more and more people to use Airbnb’s, especially when a group of friends or family are planning a trip. Or, some events or parties are planned, like someone’s bachelorette party, birthday parties or any other events attended by a group of people. Therefore, Airbnb’s are very much loved by the young generation who cannot afford hotel prices.
  • Searching for an Airbnb can often require more research and time. Hotels have visible addresses that are easy to look up and find. Airbnb often provide an estimated location that is not immediately clear to pin point whether its location is optimal. One has to read the description and trust the hosts words and estimates. (Airbnb)
  • There are good surprises and bad surprises. Reviews of hotels and Airbnb’s can vary but more often than not, hotels have a lot more reviews to base a decision. Many Airbnb’s are newly and recently listed with few reviews and sometimes few pictures.

We understand that Airbnb’s are mainly attractive from a price point. They offer customers to dive into the local world from a different perspective to discover the real lifestyle and to socialize more with the locals. This is fun when it comes to a young generation who a) cannot afford hotel prices to discover a city or country b) want to organize events or stay with several friends or the family c) want easy going when it comes to traveling and are open to take care of everything like in an own “home”.

Advantages of Hotels over Airbnb

Hotels have their advantages and unique selling points that guarantee their importance to the travel industry. Let’s look at a few points of how hotels are unbeatable. Here are a few reasons why clients should rather opt for Hotels than for Airbnbs:

  • Hotels are not meant to be home-sharing, so you keep your independence, while benefiting from common food and beverage, hospitality, Gym, Spas and many other services.
  • Hotels offer a safer and less complicated solution, when it comes to travel circumstances like: delayed flights and your arrival is very late, public transportation, taxis, buses or any option of help that isn’t available to reach to your destination in time. At this point, the easiest thing to do is to then get a hotel. When using an Airbnb, these circumstances might make it very difficult to get to your Airbnb destination and check-in, in time. Meanwhile, hotels are generally easy to find and you have the availability to check in 24/7, at whatever time you might arrive. Additionally, if unforeseen changes occur to your Airbnb, booking another Airbnb on the same day can be difficult. Relying on the Airbnb host to accommodate same day requests quickly could be unlikely.
  • Consistent quality: A few unlucky guests have complained that Airbnbs that hosted them were quite different from the experience they had seen on their listings. Hotels’ quality doesn’t waver; what you see on the brochures is likely what hotels give in real life.
  • For clients, being on a business trip, a hotel is more convenient and comfortable when it comes to practicalities and services. A business individual will not have time to iron his shirt himself before a meeting, or cook himself lunch. He will also not be interested in local discoveries being on a rather professional mission. Airbnb’s will not offer the suitable services that a business client will require. Meanwhile a hotel offers all the services and comfort required, to meet the needs of a business client by easing his stay the best possible way. No time needed to look after the room, clean up behind himself or do the kitchen before checking out.
  • One major advantage is that a hotel will usually offer even business options like conference rooms or other facilities for meetings, trade shows and conventions, that an Airbnb won’t have.
  • Even so called “high maintenance” people, being used to luxury and dolce vita, will prefer a hotel, where they can drop their bags just after arrival and run to the beach or to simply have fun wandering around without any responsibility as the hotel takes care of everything.
  • Easier cancellation process: Hotels have a more flexible cancellation process than an Airbnb. This makes it easier for guests to commit to hotel bookings knowing that they have a higher chance of backing out with hotels.
  • And let’s be honest, the world of hotels and its beauty, let us dream and make us feel welcomed and enjoy our holiday in the most magical way!
  • Hotels are usually optimally located, near tourist attractions and well connected to transportation and main roads. Airbnb’s can often be found in residential areas that are not immediately easy to get around without a car. Secure parking is also not necessarily guaranteed by an Airbnb.
  • With hotel brands one can often choose and know what to expect in terms of quality, service and feel of a hotel. Travelling to multiple different countries, one may prefer to stick to a brand that one knows that guarantees a consistent experience.
  • Airbnb’s often require large security deposits in comparison to Hotels. There are also often additional cleaning fees with Airbnb’s that are already priced into a Hotel room. With hotel prices, what you see is what you get. With Airbnb, there are usually additional add-on expenses.
  • Communication with Airbnb hosts may not always be reliable. Often times the communications are done via texts and there is no immediate phone number to call. If something goes wrong, there is no front desk, reception or management to talk to that can accommodate your request immediately. For a quick check-in and check-out, Hotels can also be much more reliable.
  • With Airbnb, one often has to rely on the availability dates of the home. If a place is available it is centered around the home and host and not the guests schedule. Dates may not be suitable. One often has to book an Airbnb months in advance and schedule a trip around the homes availability to get the place.
  • With hotels one can usually rest assured that it can be booked days in advance or even on the day of arrival. If one doesn’t plan well ahead and isn’t quick enough to book an Airbnb home, it may be gone and one likely has to look all over again for another place. Then one place may have the right location but isn’t as charming and another place is charming but not in a good location. With hotels, one can usually find the perfect balance.
  • Hotels usually offer better security, surveillance and valet services which Airbnb’s cannot often match. With a hotel one can be mostly assured that the premises are secured and that there are staff around in case help is needed.

These are only a few of many good reasons, why it would make sense to rather use a hotel than Airbnb.

Who is the winner? To make a long story short, both! And it depends pretty much on the clients’ personal choices and needs.

Whether a stunning hotel or a nice Airbnb Apartment, both options can work perfectly and are actually complementary other than really competitive.

What is your choice?

Get in touch to plan a sales strategy for your hotel. If you want to receive the latest deals, please subscribe to our newsletter below.

T +41 (0)61 564 07 40
info@alpineahotels.com
www.alpineahotels.com

in Selling a Hotel Posted by Alpinea

Interview with our Founder and CEO, Monica Fontoura

Interview for the IMMO’21 Swiss Property Fair Hotel investments for a better time after the pandemic.

Hotel investments for a better time after the pandemic

What is Alpinea?
We are a Swiss hotel brokerage and advisory company. Alpinea sources hotel real estate assets by consulting with hotel property owners, partners or investors and presents these projects off-market to Swiss and global investors for acquisition.

You just mentioned projects “Off-market”, can you explain what this means?
Sure. This is basically about privacy and confidentiality. Normally no hotel owner wants to disclose that his hotel is for sale, for several reasons: staff can get discouraged, customers may think that it has problems, and the asset price goes down. On the other hand, investors or organizations that want to buy a hotel may not want to advertise it openly. That is why both sellers and buyers use the off-market sales channel, where confidentiality is ensured and only when the transaction is made do they choose whether to make it public.

Why should a Hotelier choose you, I mean, what makes Alpinea different from other commercial real estate agencies?
We really are specialists in this industry and know how to evaluate a hotel beyond its balance sheet. I trained in hospitality at the Glion Institute of Higher Education, and our collaborators are all experienced in this field. Being in Switzerland also means relationships with credible financial institutions. From here, we reach international markets in Europe, North America, the Middle East, and Asia.

Why would I choose to invest my money in an off-market hotel?
Because now is the right time to find opportunities for great future profitability which will also bring social and economic sustainability at a local and global level.

What was the real impact of the pandemic on your business?
Huge. On one hand, the number of available properties has grown significantly, and we’ve had to grow our team as well, also to support independent hotels, which often do not know how to reach investors. We have worked hard in 2020, and it is nice to see how we are being recognized internationally in this market as a serious and reliable partner.

Where do you see your company in the future?
I want Alpinea to continue bridging the gap between the hospitality and the finance and wealth management services industry. There’s a huge opportunity here, and I think hospitality has much to offer to investors. People still want to come together, to travel and experience the world. This year we’ve learned how important that is to us. So, in the post-pandemic world, I’m sure there will be a period of fast growth, where resources that are now sitting idly on the side will be looking for areas of investment. Alpinea will be ready to help those resources come to the hospitality industry.

Contact
ALPINEA AG
Stücki Village
Hochbergerstr. 70
4057 Basel
T +41 (0)61 564 07 40

info@alpineahotels.com
www.alpineahotels.com

in Selling a Hotel Posted by Alpinea

European Autumn Destinations

Get inspired by the cozy season. The leaves are falling! We opened our portfolio and chose our five favorite cities and regions to have an Autumn experience:

The leaves are falling! We opened our portfolio and chose our five favourite cities and regions to have an Autumn experience:

 

Istanbul

The most inspiring view of Istanbul

One city, two continents. Istanbul is the perfect destination for this mid-season due to its exotic climate. In autumn you will be able to stroll through its full of history streets away from rain and heat spikes. Rich in culture, in a mix of tradition and modernity, Istanbul served as inspiration and scenery for many different works of art.

Main attraction: After wandering around the city, enjoy the wonderful local cuisine! A refined fusion of the best in Asian and Western cuisine.

Rome

Exquisite ambience in Rome

Rome is undoubtedly an open-air museum! But the truth is, this museum is very famous, therefore – very busy. So, the best time of the year to visit is Autumn. Enjoy the mild weather and wander around the city. Enjoy the secret but equally wonderful facades and discover its nooks and charms. Experience Rome with the locals!

Main attraction: You cannot pass through Rome without visiting the Colosseum, “the beating heart of ancient Rome” and one of the seven wonders of the world. The Coliseum will definitely make an impression on you as it still carries the whole history in it and has the ability to make us travel through time.

Douro

A paradise in the Douro Wine Region

The north of Portugal welcomes this season in a very peculiar and special way. Douro Valley, for example, is one of the regions of Europe that has its peak of beauty in autumn, a true botanical wonderland! Its landscapes are painted in warm tones and Mediterranean cuisine reaches its peak of flavour.

Main attraction: There’s nothing like doing a boat trip around the region to get the most out of this experience. The weather is mild, and boats sail along the winding curves of the Douro River. At the end of the day, stroll through the vineyards and offer a trip to your palate with a port wine tasting. Yum!

Prague

Pleasant aesthetic in Prague

The golden and copper glow that falls on the Vltava River at the end of an autumn day, makes Prague one of the most romantic sceneries in Europe at this time of year. Stroll through the medieval and bucolic alleys of the Old Town, decorated with leaf rugs, and climb up to Prague Castle to enjoy views of the city.

Main attraction: There are more than two hundred parks that form the green lung of the city! And they are a relaxing meeting point between the locals and the tourists. We highlight the Stromovka Park, the “Central Park” of the Czech Republic, which was created in the 13th century by the Czech King, a true green oasis perfect for an afternoon picnic.

Bordeaux

Marvellous Trophy Hotel in Bordeaux

Toast with one of the famous Bordeaux wines! Voted one of the most beautiful cities in Europe, Bordeaux is known for its history, landscapes and warm hospitality. The city is relatively small and flat; therefore, with the mild autumn climate, it is perfect for exploring on foot or by bicycle. Its architecture is the perfect fusion of classic and cosmopolitan!

Main attraction: Save time in your schedule to visit Place de la Bourse, an architectural work of art, built in 1720 alongside the Garonne River, and designed by the famous architect of Louis XV, Jacques Gabriel. The heart and symbol of the city!

Are you inspired? 

Get in touch with us. We help you diversify your investment portfolio with Hotel assets that protect your legacy.

in Buying a Hotel Posted by Alpinea

Seller’s Guide

Everything you need to know before selling your Assets.

All things involved in the process of planning the disposal of a hotel such as how the sales price can ensure correct market value, the timing to sell, choosing the right agent and marketing strategies need to be considered carefully.

Hotels and resorts are usually sold as operational entities. Therefore, often all operational agreements continue, new bookings, equipment hire, and staff contracts may remain. This particularity gives hotel sales it’s uniqueness that in many cases leads to added value in the investment in the long term.

Generally, the public is unaware of any deals taking place worldwide to prevent any disturbance in the service provided by hotels and is absolutely vital to both the buyer and the seller if the property is to continue trading as well as it should. As the income earned from the hotel remains with the seller until it is transferred, it’s vital to find investors that are committed to profit from their investment.

It is always worth considering franchising agreements clauses. On a managed property is worth diving deep in the data room and looking for opportunities that an investor might have to improve revenue.

The first step is for the owner and their agent to determine what is actually required, and then to agree on fees and the terms and conditions of the instruction. A different approach may bring more value from the asset. It might be that holding the property for a short while to have changes made to the business to allow the property to be sold for significantly more.

It is fundamental that the terms of the agreement between the owner and the agent are agreed in the best way, normally it will be an off-market transaction, and initial due diligence to ensure the property will attract potential buyers is made. Opportunities to enhance trade will be discovered or potential solutions can be considered to ensure the maximum financial outcome.

The data room, including details on the title (preferably a report on the title), statutory documentation (including planning records), financial records, and employment data need to be reviewed.  Any licenses, subleases, or agreements with third-party operators will also be reviewed for their impact on the potential profitability, Any treasure hunting opportunities should be sought and considered as to how they will best help sell the property.

The disposal method and process will be agreed together with the specific marketing strategy. Potential buyers will be discussed in detail, with a specific plan designed and followed by the parties. A ‘guide price’, may be considered at this point.

 

This involves the production of any marketing material and preparing an online area where access can be granted to specific parties so they can fully evaluate the opportunity, while still retaining a level of confidentiality for the seller.

Typically, it will include legal documentation (leases, title documentation, operating agreements, statutory licenses and consents), financial reports (with full historic and budget management accounts), a property’s details (floor plans, surveys, reports, valuations, photographs), general market information (data on the local area and local market) and employment sector details (staff details and sample contracts)

In the best-case scenario to determine which offer is the most favourable to the seller is the highlight of the process. This may be the highest offer, the quickest or the offer that has the least risk, only offers from reliable sources have to be considered.

Typically, the seller will provide an exclusivity period to the purchaser, while they work through the due diligence for financial, legal, valuation, and condition. This will involve one party spending significant amounts of money on due diligence and is only usually possible when a property is particularly desirable to investors.

The next stage is to exchange contracts with an agreed completion date. There will usually be a stock audit on the day of handover, with an additional sum paid on the basis of actual stock, prior to the completion of the final deposit.

Agent’s Perspective of the sale

  • Determine the scope of work

  • Visit the property and agree on sales strategy upon documentation review

  • Agree on asking price

  • Produce marketing collateral

  • Prepare data room

  • Select potential buyers that look for the exact type of investment

  • Provide an exclusivity period

  • Help through due diligence process (legal, financial, valuation, condition)

  • Exchange contracts

  • Complete the transfer

lt is important for anyone involved in the hotel business to have an understanding of the various factors that will determine how much money their hotel could sell for when assessing value it is important to focus on the bigger picture, anything that positively impacts these three factors will help enhance the potential sale price:

  • Profits

  • Purchaser willingness to pay for the type of hotel

  • Infrastructure and renovations

If the property has a higher alternative-use value and the seller has taken steps to open up the opportunity, by gaining planning consent for a change of use and undertaking an independent feasibility study for renovation, then the offers received are more likely to reflect this additional value.

Get in touch to plan a sales strategy for your hotel. If you want to receive the latest deals, please subscribe to our newsletter below.

in Selling a Hotel Posted by Alpinea

Buyer’s Guide

If you are thinking about buying a Hotel: this Guide is for you!

 

Buyer’s criteria

Not only distressed hotel properties are seen as “good buys”, but an appropriate selection of hotels for an investor also has to meet their needs, a correct market price, and has to be profitable in the long term. Prices per room involve several variants, to choose an adequate investment one has to consider all of them.

 

Meeting the buyer’s requirements

Hotel investors vary on their profile, some are more driven to generate an income, others to benefit from capital growth. The majority of them are investing in hotels to ensure capital security and many operators tend to have hotels in different locations to diversify their offer to customers.

The remaining criteria for a ‘good buy’ are ‘reasonably priced’. This is often construed to mean cheap, or good value. However, the real meaning is that the risk/reward relationship is favorable to the buyer, meaning that the rewards outweigh the risk.

To understand the dynamics of this equation, it is important to first identify the potential risks and then ensure that the yield adopted adequately reflects the risk associated with the purchase.

 

Yield selection for investments

Determining the correct yield with which to value a property investment is fundamental in assessing the value. As such, each investment needs to be assessed on an individual basis, drawing from the most similar types.

Depending on the investor is more likely that they look for a lease than a management contract. Management contracts in unproven markets tend to attract softer yields than in traditionally strong markets with strong underlying property values. The tenant will have a major impact on the yield that will be applied to an investment.

The financial standing of a company is often reviewed through various rating agencies, they provide risk assessments, which the investment market uses when assessing how desirable a tenant is likely to be.

Other factors like the quality of the operator, their suitability for the operation of the particular unit, their track record, and the market perception of the operator will also have an impact on the market yield for such an investment.

 

Vacant possession properties

It is likely that the market will consider many factors when deciding what multiple of earnings to pay. Everything that could have an impact on the profitability of the hotel and/or future growth in the capital value is likely to have an impact on the appropriate yield.

The so-known expression: location, location, location is more important than ever for hotels, as well as the type of property, the quality, and the condition of the property. In regions where the hotel market is particularly booming, then the number of new entrants to the market trying to gain a foothold will increase competition.

External factors in favor of a certain location, a new airport, and local infrastructure investments drive an underlying growth in the value of the property. When there are opportunities to improve the trading of the property through redevelopment, extensions, or repositioning the property in the marketplace, then profitable investments are likely to take place.

The historic trading profile of the property is crucial for the analysis. In many cases, the more stable the trading history, the more accurate the yield adopted, as well as the availability of funding, and the provision of debt can secure the deal.

On the other hand, if a substantial proportion of revenue comes from a less secure income stream (for example, F&B or short-term sublettings, rather than from rooms) the value of the property might be undervalued. The risk will increase also if the business relies on one company’s bookings for example.

The Flexibility of the operator to adapt to changes in the market and the brand-ability to position itself in a particular event such as COVID-19 post-lockdown could lead to more competition for the property.

 

Operational due diligence

A potential purchaser or valuer needs to review the property to see how it is operating. A hotel needs to meet the constantly changing environment of its potential customer base to be profitable.

It’s important that the due diligence reviews the operational suitability of the property for its given market. If a property is no longer suited to its historical market, reinventing the business model might be an alternative, without the need for extensive capital expenditure.

If the market requirement has changed, then the achievable trading profits may be impacted. lt is important to review each part of the business that makes up the overall property. A hotel needs to meet the specific requirements of the market it is trying to appeal to, allowing it to compete with current, and proposed future, supply if it is to stay relevant and successful.

From an owner’s perspective, the hotel usually needs the ability to deliver bottom-line returns, while from an operator’s perspective, it may also need to meet brand standards, to help build brand recognition for the operator and ultimately enhance the brand value.

 

Do you need more information? We are here to help you!

in Buying a Hotel Posted by Alpinea

Hotel Investment Features

Lately, there has been a strong shift to diversify property holdings in many investors’ property portfolios. Income-generating properties, such as hotels, have started to become more appealing to investors.

The market has become more specialized than ever before, the increase in the range of operators who are prepared to offer leases and management contracts has led to more options for potential hotel investors. This increasing demand has led to a wide variety of hotel investment structures being created, from EBITDA-based leases, turnover leases, fixed RPI (retail price index) investment leases, and management contract investments.

Pros and cons of hotel investments

Pros

Cons

Pride of ownership

Relatively large lot sizes

Potentially excellent returns

Difficulty to access off-market properties

Limited need for a comprehensive refurbishment

Expensive and time-consuming

to market

Returns can be enhanced by investor’s management

Relatively illiquid

Great hedge against retail investments

High transaction costs

Complements mixed-use developments

Relative security from property investments

Tangible investment

 

Positive attributes

Hotels have a number of advantages over other investment classes and, indeed, against more traditional property investment categories. These attributes attract specific investors who look for such characteristics in their Portfolios.

 

Pride of ownership

Hotels have a distinctive appeal among property classes in providing true pride of ownership for the investor. The ability of hotels to generate such trophy status is unmatched by other property classes. Potentially because of the ability of the owner to offer hospitality to potential clients and business partners (“Please, come and stay at my hotel.”), the amount of high-net-worth individuals (HNWIs) who own hotels are disproportionately large.

 

Potentially excellent returns

When the elements of location and great architecture come together and the property is well managed and reacts to market demands, then hotels can generate excellent returns, above typical real-estate returns, because of the operational risk involved.

 

Limited need for a comprehensive refurbishment

Hotels normally reserve a share of the revenue they generate into a maintenance fund to keep the property in a good state of repair. This is because if the property deteriorates, then trading is negatively impacted as customers are unwilling to pay as high a price to stay in a poorly decorated hotel. As such, this standard investment means that hotels are one of the only asset classes where regular redevelopment is not required.

 

Possibility to positively impact on returns through effective asset management

The very nature of the hotel business means that the operator needs to react fast to changes in the market dynamics to keep their market share. The ability of the owner to positively enhance their returns through their own action is a key reason for investing in hotels, for certain investors.

 

A good hedge against retail investments

Retail remains the primary property investment class, with investment funds allocating significant proportions of their property investment into this class. Hotels have been shown to be an effective hedge against the downturns in the retail investment market, making hotels a sensible way to mitigate risk for portfolio managers.

 

Complements mixed-use developments

New property developments tend to be mixed-use schemes because the risk for the developers is inherently diversified. Hotels form a very valuable part of most mixed-use schemes, as evening and night-time use bring a different dynamic to a larger development.

 

Security

The relatively consistent demand, along with the perception that “wealthy” people own real estate, ensures it has consistent popularity as an investment class among individual investors.

 

Tangibility

The physical’ nature of real estate with a ‘tangible presence’ provides comfort to a certain group of investors.

 

Negative attributes

A hotel tends to have the same disadvantages as standard real-estate investments. They generally comprise large lot sizes. Transaction costs remain high compared with other investment classes. The market for hotels is typically even more secretive than for standard real-estate investments, with ownership, prices, and yields paid, as well as trading data, guarded against public scrutiny. In addition, a hotel has one additional deterrent to standard investors: the element of business risk associated with the asset class.

 

This operational risk can be quite foreseeable, reliable agents can lead the buyer to a profitable investment.

in Buying a Hotel Posted by Alpinea

New Era for Business Hotels

 

The Hotelification of Real Estate. After the technological revolution triggered by COVID-19, people, places, and businesses have become more interconnected than at any point in human history. Now, business hotels that have been unchanged for decades will need to adapt and evolve.

After the technological revolution triggered by COVID-19, people, places, and businesses have become more interconnected than at any point in human history. Now, business hotels that have been unchanged for decades will need to adapt and evolve.

In about 10 years, buildings shall be fully automated and offer personalized experiences so as to support our increasingly on demand lifestyles. Workplace design will be adapted from compartmentalized to a collaborative, open, and flexible environment without hierarchical distinctions. Besides, corporations will need to adjust their outlook, management style, and workplace amenities to better motivate and retain top talent.

 

We’ll see a total integration of work, life and play into a single place, with countless options for individual personalization. The interaction between people and buildings will change—with buildings anticipating and instantaneously responding to the needs of people who occupy them. Environmental standards will become fundamental, and the value of a property will be perceived as much more than the price per square meter.

Employers will have to offer a wide variety of working locations that are flexible enough to meet their employees’ personal and professional needs. This is a big leap from the rigidity of limiting employees to a single location and putting the burden on them to make that location fit their life. Thus, the new work model will require productive flexible spaces to be available near fitness centers, malls.

The big win as an experienced operator is creating a bond between and adding value for all parties. The result will be that flexible workspace grows to at least 20% of the office market in the next decade. Most organizations will understand what portion of their portfolios is best suited for long-term committed space vs. flexible space.

Eventually, a new and more collaborative business model will emerge in which landlords, tenants, and flex space providers work closely together to create the right win-win-win outcomes for all.

The ‘Hotelification’ of Real Estate

Branded live, work & play places are ready to have their moment.

“Hotelification” is the reinvention of residential, retail, and office space based on inspiration from the hospitality industry; this trend is shaking up real estate’s business-as-usual model. Global players are offering branded and customized spaces for an increasingly mobile population of international knowledge workers who want spaces that offer a variety of short-term facilities from living and working to events, to shared restaurant tables, among others.

Benefits of Hotelification 

The hotelification movement represents an intersection of several different trends, all expected to strengthen in the near future. Notably, the rise of the tech-based marketplace for home stays has forever changed the hospitality landscape, producing 6 million new rooms worldwide in a single decade. The sector of alternative accommodations, including short-term rentals and apartment-style hotels, generated more than US$ 127 billion in worldwide revenue in 2018.

The New Boomtowns

Very soon, Generation Z will start inheriting (and changing) the economy.

Urban populations are booming, and cities are struggling to improve housing, transit, and environmental sustainability. London is estimated to have 2.06 million inhabitants of Generation Z living in the city by 2030. In this new populational scenario, “Multifamily” will take center stage in real estate investment. The term “multifamily” refers to apartment blocks or campus-style developments in single ownership with market-level rents and professional management. Such properties provide favorable investment returns.

To meet this new demand, institutionally owned multifamily rental housing will account for one-fifth of global investment volume, and cross-border capital will help power the shift. In 2018 alone, US$38 billion of cross-border capital was allocated to residential, accounting for more than 10% of total cross-border investment volume. Residential investment across Europe, including the U.K. and Ireland, totaled US$58 billion in 2018, up from just US$5.5 billion in 2010.

Multifamily models across the globe have the potential to make real progress in meeting global housing needs. Global expansion of the multifamily sector can attract persevering long-term investors.

in Consulting Services Posted by Alpinea

European Summer Destinations

Get inspired by the sunny season.

Summer is on its way! We opened our portfolio and chose our five favorite cities to have a summertime experience:

Albufeira

Comfort in the nature of Albufeira

It is impossible to think of summer in Europe without thinking of the Algarve, a paradise in the south of Portugal. And our suggestion is Albufeira because it is one of the most energetic cities in the area and is a short drive from other cities on the Algarve coast. In addition to the wonderful climate, Albufeira has many beautiful beaches (a reference in Portuguese tourism) and in summer the city is full of activities throughout the day and rich nightlife. The perfect destination for a family trip and gateway with friends. Don’t forget to try the amazing Portuguese gastronomy (in Albufeira we recommend the fish dishes!).

Main attraction: Get lost in the historic streets of the city that surround Old Town Square, these streets with the smell of the sea tells the history of Portugal and is full of Arab influences. The perfect plan for culture lovers.

 

Athens

A piece of history just outside the window

A city with so many gardens and rooftops that seems to have been designed for the summer. According to the locals, the perfect day starts with a dip in the sea, a cultural afternoon and an evening full of dancing (in addition to bars and restaurants for all tastes, in the city there are lots of festivals happening all summer). As soon as you get the chance, go up to the Acropolis and have a cool drink while looking around the place where modern civilization was born.

Main attraction: It is on the Athens Riviera, in the south of the city, that you find the beaches. They are a mandatory stop at this time of year. And if possible, take a day or two and take a boat trip to one of the famous Greek islands. The most beautiful jewels in the Mediterranean are “right outside the door” of Athens!

 

Sardinia

A fairy tale in Sardinia

Clean waters, sunshine, white sand … A tropical destination? No! We are talking about Sardinia! This paradise island in Italy is a mandatory stop in Europe for beach lovers.

The best thing about Sardinia is the fact that it is a very eclectic destination. The island is full of natural parks and playgrounds suitable for children. And its romantic landscapes and charming nooks makes it a perfect choice for a romantic escape.

Main attraction: If you are looking for the best nightlife to unwind after a day full of adventures, such as clubs and beach parties, we suggest: Costa Smeralda, San Teodoro, Santa Teresa di Gallura, Alghero and Villasimius. You can learn more about each one of them in this article. There’s no space for boredom on this island!

 

Barcelona

Historical building in Barcelona

Barcelona has a number of details that make the city a great destination for summer! First, it is one of the cities with the mildest climate in southern Spain; second, during the summer it is quiet and free of traffic because a lot of the locals are traveling; and last but definitely not the least, it is a city of reference in Europe when it comes to Culture. Don’t miss all the opportunities to try a local delicacy, visit the famous Picasso Museum, and in case you are a fan of sports, do a tour in the Barça Stadium.

Main attraction: We can’t talk about summer in Barcelona without talking about the Barceloneta beach! Imagine yourself there with your feet in the hot sand, a beautiful sunshine and a fresh ocean breeze in your hair. Sounds perfect, right? Fun fact: The beaches in Barcelona are not entirely natural, they were created with sand dredged from the sea bed, and the palm trees came all the way from Malaga.

 

Troia

A piece of Art in Troia

Just one hour outside Lisbon you can find a secret wonder of Portugal: Troia! A sandy peninsula that rises through the Atlantic, in the north of Comporta. The weather in Comporta is mild all year round, and is a sought after for the Golf and the Casino lovers. The options are endless; dive in the crystal clear waters of the reserve of the Sado estuary, do a hike and take the time to watch the many species of birds that inhabit the surrounding nature or take a boat trip –  if you pick the right day, you can even see the dolphins.

Main attraction: The country is full of relics left by the Romans when they inhabited the Portuguese territory. Visit Troia’s Roman ruins, classified as “Nacional Monument” in 1910. Historians point out that they were built in the first half of the first century. In that place they could find salting factories, houses, thermal baths, a mausoleum and its necropolis. A place full of stories to discover!

 

Are you inspired? 

Get in touch with us. We help you build your investment portfolio with Hotel assets that protect your legacy.

in Buying a Hotel Posted by Alpinea

Should I sell my Hotel?

We are here to help you make the best decision.

During this turbulent time, you are probably finding yourself thinking: Should I sell my Hotel? We can help you: The answer is yes!

During this turbulent time, you are probably finding yourself thinking: Should I sell my Hotel? We can help you: The answer is yes!

Why? Is simple! If, on the one hand, you are thinking of selling your hotel to obtain an immediate cash flow to invest in new projects and ensure support for your legacy, there are an enormous number of investors looking for new business opportunities. Right now investors want to allocate their capital to long-term investments. Your hotel can be the perfect fit for them!

A moment like this should be seen as a challenge and not an obstacle!

This unexpected turn of events in the world will be a turning point for the Hospitality Market. This is the perfect time for you to make a decision and take the next step into an enthusiastically new phase of your life.

Elements to be considered:

  • Price

The price must be fair taking into account the hotel market and its guidelines. The fairer the price, the faster the hotel is sold. A potential buyer does not want to invest in an Asset with an above-average price, but he is also suspicious if the price is below expectations.

  • Property conditions and features

Was your hotel built recently? It is a historic building but has it been recently renovated? What is the number of rooms? What are the special extras that your hotel offers? The more information the better: This will determine how we build your off-market hotel investment case and decide who are the best buyers for you!

  • Operator

Is your hotel part of a franchise or do you do the management internally? Having external constraints can delay the timeframe of the sale on your side, but it can be really appealing for some investors’ profiles.

The three most frequently asked questions:

  • How long will it take to close a sale?

We cannot give an exact date because every sale is unique. What we can guarantee is that the market has been in great demand recently.

  • How much will it cost?

We are happy to have a meeting with you to study your Asset and reach an agreement regarding our fees. Always in the fairest way possible. Our expertise, connections, and negotiating skills will lead to a better profit for you and it will only cost you something if we sell the hotel.
Your success is our success!

  • How to start?

The first step is to send us some information about your hotel and arrange to come into our office to discuss the process. Due to the current social distancing, we can set up a conference call. This will be in strict confidence; we never discuss hotel properties until we are instructed to sell them. We can sign a non-disclosure agreement if required before discussing your hotel.

We have experience in the field and we are ready to provide analysis and guidance to both buyers and sellers. Our qualified hotel investors portfolio is always looking for new hotels to invest in and/or support after the current liquidity crisis.

Get in touch with us for more information!

in Consulting Services, Due Diligence, Selling a Hotel Posted by Alpinea

Independent Hotel vs Hotel Chain

Understand the differences between these two sectors of the business.

If you are looking for a safe long-term investment, buying a hotel is a great solution.
Check out the article “10 Reasons to Invest in Hotels”

Hospitality is an international industry and it’s on its way to becoming a global one. You can choose between enormous hotels in big city centers and lovely boutique hotels in the countryside. Some focus on business travelers, others on tourists, families, and even millennials: every hotel has a unique identity and that’s the magic about the business.

One of the questions you should ask yourself is: Should I invest in a hotel operated independently or operated by a hotel chain? The competition between these two options is growing and both of them are always focused on redefining the guest experience.

Independent Hotel

An independent hotel that is independently owned and operated, so it represents a more unique brand. Due to this fact, it is an investment more suitable for a niche market. The purpose of their activity is narrowed down to represent the “vision” of the organization and their strategies are more cut and clean due to the availability of capital.
Independent hotels are not physically represented across the world, but thanks to the internet they can reach their audience worldwide.
Being independent means having more flexibility in terms of standards. If you operate a hotel you don’t need to follow rules from outside, you can adapt and adjust necessities in loco according to your customer and market needs. They are famous among the Millennials because they are constantly seeking new experiences in new environments, and they represent a huge volume of travelers.

Chain Hotel

A chain hotel is a hotel that is part of a major group of hotels operated by the same company. Meaning that a single company determines the operation of all the hotels in the same group in all the different locations. They can be total or partial owners of the hotel and they manage their administration, marketing, and promotion.
Chains have a massive network distribution worldwide, in fact, the global hotel industry is dominated by hotel chains.
Luxury chain hotels are famous for their standards. If you book a hotel from a renowned brand you know that you’ll get premium service no matter the location. They are famous amongst business travelers because they are a safe choice and usually they benefit from Loyalty Programs.

What type of hotel fits your profile as an Investor?

We have both options available for you in our portfolio. Exceptional Independent hotels like this one in Lake Geneva, Switzerland, or Opulent hotel Chain in Dusseldorf, Germany.

Get in touch with us, and we’ll give you a tailored solution to perfectly fit your investment portfolio.

Follow us on social media.

in Consulting Services Posted by Alpinea

European Spring Destinations

Get inspired by our offers for spring destinations.

Winter is almost gone and you know what that means: Spring is coming!

There is nothing more exuberant than Europe in the Spring! It is the epitome of Romance. We opened our portfolio and chose our five favourite cities to have a springtime experience:

Lisbon

Fresh Design in Central Lisbon

Spring is the most suitable season for Lisbon Lifestyle. The city is famous for being sunny the whole year, but in spring colours start to pop and flowers start to blossom. Put your sunglasses, walk near the beach, drink a cocktail in the trendiest terraces and eat an icecream watching a gorgeous sunset in the Tagus River.

Main attraction: Fill a basket with traditional Portuguese delicacies and enjoy a unique picnic in the Portuguese capital. Lisbon is full of wonderful gardens for any time and company.

Funchal

Funchal, a paradise in the Atlantic

Madeira Island is a portuguese jewel in the Atlantic and Funchal it’s is capital. There is a popular saying that says: “It is on the island of Madeira that spring spends the winter.” And we believe this says everything. Besides being beautiful, the season here is bigger and that’s all we want. Enjoy the colorful, beautiful and welcoming tropical landscapes.

Main attraction: The Flower Festival takes place 4 weeks after Easter, and it is a must see. It looks like Spring has exploded and the result of that is the festival. Enjoy the aromas and varieties of flowers and plants.

Florence

Intimate Atmosphere in Florence

Italy is a popular destination in Easter, especially Florence. Why? Because spring brings a magical feeling to the city. The streets start to get filled with people with bouquets in their hands. The best way to enjoy Florence is by walking, and spring is the best season to do that, it is the perfect weather in Southern Europe.

Main attraction: Get lost in the many markets that fill the city at that time of the year. You can find them everywhere! Flowers, food, clothes: you can buy literally everything.

Vevey

A peaceful heaven in Vevey

The unique area between Vevey and Lausanne is, since 2007, a  UNESCO World Heritage Site. Vevey is the wineyard escape in Swiss Riviera. This city is well known for its wines, so it is overcrowded in the autumn. In the spring you can walk peacefully thanks to the mild weather and admire the landscapes that start to blossom: watch the city waking up.

Main attraction: Climb to the top of Mont Pélerin on the funicular and admire the view whilst tasting a local wine.

Zurich

Detailed Extravaganza in Zurich

Spring is a magical time in Zurich. The sunshine comes back and it reflects on the river and on the lake, allowing you to see its crystalline waters. You can do a hike through nature, do the roundtrip through the Zurich lake on the boat and delight yourself with some fondue (cheese or chocolate, you choose!) on one of the many rooftops in the city.

Main attraction: The spring festival: “Sechseläuten”, takes place in April and it celebrates the end of the winter. The city is full of flowers, parades and fireworks. Harvest season is officially open!

Are you inspired?

Get in touch with us. We help you build your investment portfolio with Hotel assets that protect your legacy.

in Buying a Hotel Posted by Alpinea

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