14 Oct 23 Rising hotel rates and falling inflation: good news for apartment owners 

According to Hotel Monitor 2024 Powered by Amex GBT Consulting, hotel room rates in Europe are projected to increase by double-digit percentages in 2024 providing a welcome boost for serviced apartment owners.

The report forecasts specific rate increases in key European destinations:

  • Munich +7.2%
  • Amsterdam +10.8%
  • Brussels +6.2%
  • Dublin +10.0%
  • London +9.1%

Real estate traditionally acts as a hedge during periods of high inflation as the real estate asset holds its value and rental income can be indexed with inflation.

As costs rise for hotels or serviced apartments, the operator passes on the costs to paying tourists in the form of higher overnight rates creating an inflation-proof model.

Another important factor in the higher prices is the surge in post-pandemic travel thanks to pent-up demand.  According to Tirol Werbung, in the months from May to the end of September, guest arrivals in Tyrol increased by 5.9 percent to 5.7 million, and overnight stays increased by 1.6 percent to 20.5 million.

This coupled with the imbalance between supply and demand for hotel rooms (developers have not been building enough rooms in the last two years) is pushing up the prices on a global scale.

Keith Barr, CEO of IHG Hotels and Resorts, offers his perspective: “We had robust supply growth over an extended period of time, which did keep rates down. It’s just going to support pricing being where it should have been over time, which is great for this industry.”

In Austria, we are also achieving higher rates on our 2024 bookings.

A professional serviced apartment operator like All-Suite Resorts https://www.all-suite.com/ uses yield marketing software by https://hotelpartner-ym.com/ to adjust its overnight rates every 4 minutes to get the highest yield for apartment owners.

As an example, All-Suite Resorts monitors market data and keeps overnight prices high for key Winter season weeks in the knowledge that supply for rooms in a given location will start to fall and prices rise accordingly.

In other words, they achieve a higher price by not selling out too quickly.

Meanwhile, inflation in the Eurozone after peaking at 10.6% has been on the decline over the past year.

In Germany, the annual inflation rate plunged to 4.3% in September from 6.4% in August.

“This likely is the beginning of an accelerated decline” in eurozone inflation, said Claus Vistesen, the chief Eurozone economist at Pantheon Macroeconomics.

So, in summary, it’s a good time to invest in Tirol thanks to falling inflation and rising overnight prices – plus the shortage of hotel rooms thanks to low levels of development in the last 48 months.

Here some other important benefits to consider:

  • Before the pandemic, serviced apartments were the fastest growing accommodation category in Austria with an 18% increase in bookings in Winter 2018 (source: Urlaub in Ferienwohnungen boomt https://tirol.orf.at/news/stories/2904521/)
  • Serviced apartments outperformed hotels during a pandemic thanks to well-spaced, self-contained apartments where tourists can arrive in their own car, have the flexibility to cook and avoid communal areas
  • Tirol is one the least densely populated areas in Europe with 59 people per square kilometre versus Germany 232, Netherlands 521, England (UK) 424, Belgium 376, Czech Republic 135
  • The Summer tourism business is growing fast even in high altitude resorts
  • Tourists are lowering their CO2 footprint and choosing closer destinations
  • For the apartment owner, there is capital growth in the mid-term
  • WFH: more families are spending time in the mountains and skiing when the weather is perfect and working back in the apartment when necessary
  • Lifestyle investment: owners can earn up to 4% per annum but also have healthy holidays with family and friends.

Please Contact us today to find out more about our inflation-proof property investments.

The Telegraph: “Why we should all be more Austrian about autumn”.

In the Tyrol, September is about embracing the last of the long days and drinking good wine

Autumn might be fast approaching, but that doesn’t mean it’s time to batten down the hatches and head indoors just yet – particularly not if you opt for a short break in Austria, where at this time of year everyone is up in the mountains hiking, mountain biking and, of course, foraging.

And there are myriad reasons to do just that. Austria does autumn colour extremely well (it’s not all pine forests in the Alps), and there are nuts, berries, herbs and, most prized of all at this time of year, mushrooms.

PDF 230919 Why Tyrol is the best Austrian state to visit this autumn

Tyrol in Austria is home to stunning natural landscapes that are well worth a visit, particularly in autumn CREDIT: Alamy Stock Photo

https://www.telegraph.co.uk/travel/destinations/europe/austria/why-tyrol-is-the-best-austrian-state-to-visit-this-autumn/

Demand for holiday hotels in Alps unbroken

English summary of an article on the hotel and serviced apartments buiness in Austria.

https://www.tourismuspresse.at/presseaussendung/TPT_20220913_TPT0001/investoren-setzen-weiter-auf-berghotels

 Vienna (OTS) – The demand for holiday hotels in the Alps is unbroken (Die Nachfrage nach Ferienhotels in den Alpen ist ungebrochen)

Many conversion and new construction projects are in the pipeline. At the same time, the industry is confronted with new challenges.

Despite difficult conditions (energy crisis, corona) and other adversities (high construction costs, rising interest rates), domestic hoteliers and hotel developers remain optimistic for 2023.

New concepts and developments are being planned and implemented.   Project developers expect only modest growth for urban areas, which is why they are increasingly looking for favourable opportunities in the Alps.

Experts from the Prodinger company, who look after around 500 hotel businesses in the areas of tax advice, tourism advice and business advice, can confirm that the holiday hotel industry is doing relatively well despite the difficult starting position before the 2022/23 winter season.

However, businesses in top locations that are suitable for new developments are few and far between in the leading holiday regions.  Building permits and ongoing changes make new construction projects difficult.  The space efficiency suffers from high construction costs and a lack of employees.  Another challenge is the fact that financing and subsidies will be based on real estate efficiency in the future.  There will be a change in restaurants and food concepts in the holiday hotel industry. The good old 4-course half-board has an expiry date.  This makes new restaurants necessary.

In many classic holiday hotels, people are considering reducing the service and switching to serviced apartments. 

Investment and capital intensive

 A twenty-year comparison shows that hotels made large investments by the end of 2020.   Operating performance (GOP) lagged over the same period.  The new buildings and conversions, which continued during the Corona period, can be explained on the one hand by the investment bonus and on the other hand by the long project lead time.

Hotel revitalization

 A trend that is likely to intensify next year is the revitalization and reorientation of existing properties in the holiday hotel industry.

A good example of one of these concepts is the TRIFORÊT alpin.resort in Hinterstoder, which will open on December 1, 2023 and will be managed by the hotel operator arcona Hotels & Resorts. It is based on a 365-day concept.

The old stock comes from the Berghotel Hinterstoder from the 1960s.

Due to an investment backlog, this had reached the end of its product life cycle, so that a complete revitalization became unavoidable.

“Use instead of possession”

 There will be further exciting project developments in 2023 under the motto ” use instead of ownership “.   The well-known problem of leisure and second home ownership is leading to a boom in the temporary use of alpine real estate. ” The hospitality sector will play a bigger role here, “ says Thomas Reisenzahn, MD of the Prodinger consulting group.

New forms such as “Best Ager Hotels” for the young at heart in the third phase of life are also taking hold in holiday regions.  New forms associated with investment opportunities.

Alternative forms of accommodation such as tiny houses, glamping, tree houses or chalets will continue to gain in importance in 2023 and expand the tourist offer in holiday regions.

300m Euro fund in new asset class in DACH region: serviced apartments & aparthotels 

Article in summary: 

  • AIF AlpenReal fund is investing in serviced apartments and aparthotels in the DACH region where there are 15 to 20 well-known operators 
  • Serviced apartments & aparthotels is a fast-growing asset class and increasingly popular choice for tourists 
  • They also benefit from the current work-from-home trend 
  • Flexibility / self-catering options (your own kitchen), digitisation and fewer communal areas have all been important factors during the pandemic for this type of tourist accommodation
  • Whilst the hotel asset class has suffered during the pandemic, serviced apartments have continued to perform
  • Larger operators who previously focused on business/city hotels are entering the market e.g. Accor and Dorint
  • Tourists in the DACH region feel safer taking vacations closer to home
  • Working part-time whilst on a skiing or mountain-biking holiday with the family is also an attractive option
  • The fund offers an opportunity for customer portfolios to invest in local and sustainable projects
  • The target distribution yield is an average of 6% over 10 years 

Source: Fundview.de (Tim Habicht 08/06/2022)

https://www.fundview.de/posts/2022/06/2022-06-08-assetklasse-aparthotels-in-der-dach-region-aif-will-300-millionen-euro-assets-einsammeln.html 

14 May opening of the Katzenkopf lift and bike trail in Leutasch

The Summer season starts on 14 May in with the opening of the Katzenkopf lift starting at 1130m taking you up to the Katzenkopfhütte at 1380m and Leutasch Bike park.

Alternatively, there is a cycle path which is 2.6km long to reach the top (it normally takes 50minutes on foot to walk).

There are 5 trails to explore from the top of the lift ranging from very easy to medium for advanced bikers who like jumps.

Bike park day tickets prices start at 19Euros per day for a child, 24Euros for teenagers and 29Euros for adults.

https://www.youtube.com/watch?v=GHHBKmt7-AY

https://www.katzenkopf-leutasch.at/wp-content/uploads/2021/07/KatzenkopfLeutasch-Trailmap-D.pdf

More blog updates on Leutasch to follow.

Serviced apartments 20% higher occupancy than hotels

The serviced apartment segment proved its resilience during the pandemic according to a recently published market report “Serviced Apartments 2021” (Source: https://www.ahgz.de/).

The 2020 occupancy rates for serviced apartments were at least 19% higher than the hotel sector and 28% higher in April 2020.

According to the current planning status, the serviced apartment segment will grow by 48% by the end of 2023.

Other news:

Our operator all-suite.com is getting lots of bookings for July and August and even into September as the number of new infections has fallen in Germany (19.9 per 100,000) and Austria (24 per 100,000).

There has also been another lifting of restrictions in Austria:

  • The curfew has moved from 2200 to midnight
  • 8 adults can meet indoors and 16 outdoors
  • Social distancing is now 1 metre instead of 2 metres
  • Cultural venues can now allow 75% occupancy instead of 50%
  • You no longer have to wear a mask outdoors

Austria and the rest of the EU are working on producing a Digital Covid Certificate which will become valid from 1 July.

Tirol is one the least densely populated areas in Europe with 59 people per square kilometre versus Germany 232, Netherlands 521, England (UK) 424, Belgium 376, Czech Republic 135.

And our serviced apartment model provides extra safety during these times.

Come and stay in a well-spaced, self-contained apartment where you can arrive in your own car, you have the flexibility to cook for yourself and there are fewer communal areas compared to the old-fashioned 3 and 4-star family-run hotels.

Austria to vaccinate every adult in next 100 days

Austria is performing well in its vaccination programme when compared to other European states.

According to the Statista website https://www.statista.com/statistics/1196071/covid-19-vaccination-rate-in-europe-by-country/ , Austria is in 9th place in Europe with 19.5 percent of its population having been given at least one dose, just behind Denmark which is at 20 percent.

One reason is probably that it has not stopped using the AstraZeneca vaccine for certain age groups.

Last week Chancellor Sebastian Kurz promised every adult in Austria who wants to be vaccinated against the coronavirus will be given the opportunity in the next 100 days.

Kurz also said sport, restaurants and hotels will be able to open again in May, after over 65s are vaccinated.

In May all over 50-year-olds should be jabbed, and in June vaccination is to be opened to all age groups. (source: thelocal.at).

Welcome news for the tourism industry and the forthcoming Summer season.

Our operator all-suite.com is expecting a very busy July, August and September.

June could also start to get busy and in October they are expecting good business from the hiking tourists in Oetz and Fieberbrunn where the lifts run from 13 May to 26 October.

More and more tourists now prefer to stay in a well-spaced, self-contained apartment where they have the flexibility to cook instead of the old-fashioned 3 and 4-star family-run hotels which run the standard half-board service model in a riskier environment with more communal areas.

At Kristall Spaces, we are arranging meetings next week with property buyers from Germany, the Netherlands, Belgium and the UK who are travelling for business purposes right now to invest in a property that supports tourism.

Please contact us today to arrange your property viewing in person or remotely via video.

Google travel trends: closer to home, arrive by car and the outdoors

Recent Google data from the US has verified what we assumed was happening for a while: consumers have been cooped up since the pandemic started in March when travel searches fell sharply and now they want to get away, safely.

The source is Google Trends and Search Data U.S. but the parallels with key European markets are obvious e.g. Germany, Netherlands, UK, Belgium, Czech Republic.

This Summer has been a great success in Tirol for our operator with our owners’ apartments reporting rental income results >20% above expectation with September also looking positive.

German customers in particular feel comfortable travelling over the border into Austria by car: they can leave anytime, they want self-catering and they know that Tirol has only 395 confirmed infections and 108 deaths caused by the virus.

They can also find lots of nature and very few people: Tirol has a population density of 59 people per square kilometre versus Germany 232, Netherlands 521, England (UK) 424, Belgium 376, Czech Republic 135.

Here is a summary of the Google Trends and Search Data findings:

  • Searches for ski apartment (condo) rentals increased +40%
  • Tourists want outdoor destinations and travel options with more control
  • Hiking in national parks and wilderness areas are topping their lists
  • Searches in the category “winter travel destinations” grew by 30% year on year and “ski lodges and resorts” by 30% month over month
  • “The near outdoors” is 2020’s most popular destination

https://www.thinkwithgoogle.com/consumer-insights/trending-data-shorts/travel-in-2020-trends

Galtür: recognised health resort thanks to air purity

Even though the last few months were a challenge, the latest developments of the Coronavirus pandemic now show the situation has improved enormously.

Austria is one of those countries with the currently least infections and has been therefore able to loosen its lockdown conditions earlier.  Travel into the country has been possible without any further complications since 15 June and so the people working in hospitality are staying positive about the tourism this summer and are hopeful that it’ll mainly go uphill from now on. 

We currently have many German, Dutch/Belgian, Swiss and Czech tourists making their bookings for the Summer thanks to the following criteria which make them feel more comfortable with this type of holiday:

  • Arrive by car
  • State of the art kitchen in the apartment for self-catering
  • Fewer staff to make contact with
  • Greater social distancing
  • Lots of outdoor activity
  • Very low infection rates – there are currently 8 reported infections in the whole of Tirol
  • Floor to ceiling windows that allow the scenery to flood into your living room area.

Meanwhile, the Paznaun tourism office is working on a repositioning strategy for Ischgl that addresses the COVID outbreak and the reputation for too much partying which is long overdue: the focus should be on the quality of the skiing and being outdoors in nature. Galtür is after all an officially recognised health resort thanks to its air purity https://www.galtuer.com/en/Booking/Ecarf

We don’t foresee any negative impact on our rental projections as our serviced apartment business model supports social distancing and we will take bookings from the hotels for the foreseeable future.   These serviced apartments were already the fastest growing accommodation category in Austria with an 18% increase in bookings in Winter 2018 (source: Urlaub in Ferienwohnungen boomt https://tirol.orf.at/news/stories/2904521/) but it is likely this trend will continue.

For everyone who wants to keep away from the busier holiday destinations in Austria and is craving a little more peace and a place to slow down: the picturesque climate health resort Galtür at the end of the charming Paznauntal in Tyrol is especially this summer season a recommendable destination.

Just 10 minutes from the renowned Ischgl, the quiet Galtür offers wonderful walks and hiking paths, mountain bike trails, climbing routes, lovely water springs and fresh reviving mountain air. Free from annoying pollen, Galtür has particularly clean air, which has shown positive effects on the human organism and has proven to be the perfect place for people who suffer from allergies. Magnificent landscape impressions, mountain and lake panoramas as well as untouched nature reserves awaken new energy and offer relaxation for body and mind.

Preparations for the start of the summer season in Galtür are in full swing and measures are taken by the local authorities and accommodations to ensure a safe and comfortable holiday. 

Keeping certain health guidelines further under control and considering the safety of locals and guests alike, regular cleaning and disinfection of public facilities, both indoors and outdoors, will be guaranteed and special attention paid to the latest social distancing regulations. 

All-inclusive Silvretta Card

Upon arrival one can pick up the free, all-inclusive Silvretta card and plan many exciting outdoor activities in the Paznaun valley. Offers at a reasonable price include cable cars and chairlifts, the Silvretta High Alpine Road, public transport, museums as well as indoor and outdoor pools. For children aged 5 -10 there is the Kids Club with a great entertainment program of alpine sports such as climbing, bouldering and hiking. Young people between the ages of 11 and 16 can take part in numerous fun activities in the Youth Club.

Still Waters Run Deep

The crystal clear, idyllic lakes of the Paznaun valley surrounded by mountain meadows or rock formations have something for everyone: No matter if you’re looking for challenging circular hikes (Koppsee-Zenisee & Wiegensee), mountain bike tours, climbing routes or just prefer to do some relaxed fishing, go swimming, cool off or arrange a lovely picnic. Ideal for a nice day trip with family or friends is a walk around the Silvretta reservoir (1,3km²) or a cozy barbecue in the evening at the high mountain lake Stafali pond surrounded by three stone grills. Other idyllic gems that mountain hikers should not miss out on are the Radsee in Galtür and the Wiegensee, a natural monument in the protected high moor landscape with a view of the Silvretta glacier peaks.

Galtür: An Alpine Idyll

Even the writer Ernest Hemingway recognised Galtür’s rustic charm and found inspiration in the beautiful landscape for his literary work between 1925 and 1926. Hemingway, who was extremely passionate about ski tours, enjoyed exploring the Silvretta mountain group whilst staying in Galtür. There, he also worked on his first novel The Sun Also Rises (Fiesta) and many short stories, including the pictorial narrative An Alpine Idyll which immerses the reader into the simple and spartan way of living in the high mountains of Galtür.  

Magnificent mountains

The Galtür cable car is now open from 03 July to 27 September 2020 and transports you up the mountain with breathtaking views over the Paznaun region. From 05 July the Birkhahnbahn will take you from Galtür to 2,050m above sea level for a challenging but not too difficult hiking experience. The adventure hike from Ischgl to the Idalp (2320m) including two over 100m long and 70m high suspension bridges (Kitzloch and Bärenfalle) is a fun day out for the whole family and even dogs can be brought along for this one. The Little Ballun is suitable for families with children (from 8 years) and offers a wonderful view of the Silvretta peaks. The difficulty level for that one was marked as easy, however, suitable equipment, previous hiking experience and a basic endurance can be of advantage. The high alpine adventure park Vider Truja by Lake Vidersee really isn’t an ordinary hiking trail.

In a playful way with water mills, climbing frames, a water playground and a water guiding system one can learn more about the versatile element of water. The Vider Truja is a perfect way to spend a day in hot weather and can either be reached via a 7.5 km hiking trail from Ischgl or comfortably with the Silvretta cable car. For all the experienced hikers out there we also recommend the Paznaun Höhenweg which can be completed in a few days and leads over 9 stages, 11,000 meters in altitude and 120km past alpine meadows and mountain lakes. For walking and hiking tours you need good equipment and stable (ideally ankle-high) footwear, sun protection, headgear and rainwear as well as a small energising snack and plenty of water are advisable. It is best to start early in the morning to avoid the midday heat and for very early risers, to admire the stunning sunrise. A good level of fitness is required for most (but especially for moderate-difficult) hiking trails. 

On cloud nine

With the SkyFly (03 July -13 September) you fly at 50m from the Silvretta middle station with up to 85km back to the Ischgl village centre. Side by side you can float into the valley on two ropes and share this special experience that boosts the adrenaline.

or those who prefer to stay on the ground we recommend a visit to the unique Alpinarium exhibition museum in Galtür. The clever and practical  architecture of the Alpinarium combines the building with the 345m long and 19m high avalanche protection wall. You can visit the permanent exhibition on the history of Galtür and its inhabitants plus other interesting exhibitions, photo galleries and multifaceted seminars. Directly at the Alpinarium you’ll also find Austria’s highest natural stone climbing wall (25m) and the bouldering area in Silvapark has around 160 natural stone boulders with 8 different sectors of all degrees of difficulty. Other exciting leisure and sport activities such as horse riding, rafting, canyoning, or even adrenaline-charged paragliding ensure a unique holiday experience in nature. The Silvrettabahn, Flimjochbahn, Flimsattelbahn, Alp Trider and Sattelbahn run from 03 July to 13 September. Other opening times of the mountain railways in surrounding villages are:

Ischgl:  3 July – 13 September 2020

Paznaun: 26 June – 27 September 2020

See: 26. June – 20 September 2020

Kappl: 3. July – 20 September 2020

Enjoy the wonderful Tyrolean hospitality and look forward to the perfect balance of eventful and relaxing days in the natural paradise of Galtür with clean mountain air.

All-Suite Resort Paznaun 

The All-Suite Resort Paznaun consisting of 46 apartments is located in an incredible location with breathtaking mountain views.  A spa including a heated 13m long outdoor panoramic pool, a restaurant and bar ensure a comfortable and relaxing stay. 

The professional operator All-Suite Resorts will rent and market the apartments for you and thanks to year-round tourism in the Paznaun alpine idyll strong returns can be generated here. 

Contact us today so we can register your interest in this project. We would also be happy to send you floor plans, prices and current availability and arrange a phone call to discuss the purchase process as well as financing options for tourism residences in detail.

Austrian border opens from Germany on 15 June

From 15 June, Austrian Federal Chancellor Sebastian Kurz and German Chancellor Angela Merkel have agreed to open the border from Germany to Austria allowing other nationalities to pass more freely through Germany into Austria.

https://www.welt.de/print/die_welt/article207962143/Erste-Grenzen-oeffnen-sich.html

Currently, there are 53 people reported with the virus in Tirol.  3,370 people have recovered and sadly 107 people have died.

Restaurants in Tirol open today (15 May) and hotels open 29 May.

Site visits for Austrian property investors have already begun and we are making appointments for German and Swiss buyers.

Current water temperature in the Piburger See is 20°c  https://www.bergfex.at/sommer/oetz/webcams/c17119/

Area 47 opens fully on 26 June; the wakeboard area is already open at the weekends.