Buy an apartment and live there for up to eight weeks a year. Make a return on it the rest of the time. Hard Rock Hotel in Davos makes it all possible.
With its world-renowned ski slopes straddling the sun-splashed mountains, Davos has long been a popular vacation destination. Now, as the pandemic ebbs, demand for vacation homes is up significantly at the resort, as it is in many other major tourist regions. Buts that suits the Hard Rock Hotel just fine, given it offers a complex of fully furnished apartments on a «buy to use and let» basis.
General Manager Florian K. Walther (image below) explains that you buy the apartment like you do a normal condominium. The owner of the residence can then use it himself for a maximum of eight weeks per year, three of which can be during the peak season.
When the apartment is not occupied by the owner, the hotel rents it out as a suite to other guests. The owner benefits from hotel marketing, pricing, and caretaking by experienced hotel staff. «There's even a condominium owners' meeting,» he adds.
A Hotel at Your Feet
Tenants and owners can use all hotel's infrastructure, including the restaurant, bar, spa, and so on. Hard Rock Hotel Davos opened in 2017 and is the first of a series of hotels in continental Europe.
They stand apart from other hotels because of the special atmosphere created for guests. It has a world-famous music concept, a spa, and a rooftop bar with a 360-degree panoramic view of the city and mountains. However, individual furnishing of the apartment is not possible; it is supposed to meet the high standards of the 4* superior house.
Income is shared between the hotel and the owner and the profit from the residence is distributed to the owners once a year. Costs and hassles of renovations are not borne by the owner. Instead, they regularly pay into a common fund and the hotel takes care of everything else, including cleaning and maintenance. But there are a few conditions. Owners can’t furnish their residence individually as the suite needs to meet the high standards of a four-star establishment.
There are 15 Hard Rock residences currently on offer as eight of them have already been sold, Walther says. Most of them have been sold to private individuals and some to investors. The units currently for sale comprise 2.5-room apartments (60 square meters), 3.5-room units (90 square meters), and 4.5-room residences (up to 130 square meters). The price per square meter is around 15,000 Swiss francs.
Returns Depend on Occupancy
What do the returns look like? Although no concrete ROI is promised, the expected rental income is spread over the year, and depends on the hotel's occupancy rate, with higher returns seen during the winter season and mid-summer than in spring and fall.
The return also depends on the type of apartment, the price, and the amount of mortgage a buyer takes out to purchase the apartment. However, Walther estimates that an ROI of 1.7 to 3.4 percent per year is reasonable. He emphasizes that the figures are based on concrete empirical values.
World's Leading Congress Destination
Davos is a congress city and one of the leaders in the global market. It has a long tradition in the sector and the necessary infrastructure. In a few days, the World Economic Forum (WEF) annual meeting will be taking place again – for the first time since 2020.
Walther also notes that the Hard Rock Hotel Davos is «one of the best performing hotels in Graubünden». The winter season 2021/22 was an extremely good one. He said that the residences have been registering increasing occupancy given that «the demand for apartments and home office opportunities in the mountains has increased». Given all that, another 16 residences look to be in the offing for 2023.
