World Economic Forum: a goldmine for Davos homeowners
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Davos homeowners are hiking prices on Airbnb to capture the fortunes of the elite attending the World Economic Forum that starts next week.
The few thousand industry leaders, politicians, celebrities and hangers-on about to embark on their annual pilgrimage to the Swiss Alps seek to block book the best rooms and houses in the most secure locations — but even the most modest come at a cost.
For residents of Davos, the new arrivals are a goldmine. “I hear you can get the same amount for the week that you pay for the whole year [in rent]”, says Sascha Ginesta, a local real estate assessor for Ginesta Immobilien.
Browsing apartment rental portal Airbnb a fortnight out from the conference, it is clear that locals are cashing in. Across the handful of listings remaining, the average nightly price is a shade under £2,500. A single bedroom, into which three beds have been squeezed, is the most affordable of the set, at £795 a night. A three-bedroom apartment, listed at £1,911 a night during the dates of WEF, is renting for an eighth of that price a week later.
For hotels, there is an “unspoken rule which is [you can charge up to] 20 per cent on top of the top season. Under the table I have no idea whether there is a limit on it”, says Dagmar Weber, director of residences at the Hard Rock Hotel Davos.
It seems the “unspoken rule” often goes unobserved: a double room at the Hotel Derby for the three nights of the conference was advertised for €7,484 (on January 4); the same period the next week cost €237 – a reduction of almost 97 per cent. Other than the dates, the only discernible difference between the offerings is that the former includes breakfast.
“Everybody knows this is the time of the year when everything changes,” says Weber. It is “regulated chaos” but, she estimates, “more than 90 or 95 per cent of locals profit from this type of meeting. They work with it.”
As well as quick cash, the conference provides a wealth of anecdotes, which locals trade year-round. One former hotel employee describes the jeopardy of having Ariel Sharon and Yasser Arafat, then Israeli prime minister and chairman of the Palestine Liberation Organization respectively, staying under the same roof; another describes the giddiness of a brush with Bill Clinton.
The conference may animate Davos, but the town is not deserted outside of January. In part that may be thanks to the Lex Koller and Lex Weber laws that restrict the number of second homes which foreigners can purchase and limit the number of second homes that can be built. Most of the people who live here do so year-round.
Beyond property regulation, Davos has tuberculosis to thank for its perennial buzz. In 1860, the town harboured a modest population of around 1,500. That number grew almost sixfold in the following half-century as TB — the “great white plague” — ravaged Europe, becoming the cause of an estimated 25 per cent of all deaths on the continent at its mid-19th century peak.
While the poor and infirm were consigned to convalescence facilities little better than prisons, those with the money and inclination could follow the wellness programme laid out by Davos GP Dr Alexander Spengler, who implored patients to “exploit the healing power of the diluted mountain air”. With a favourable microclimate and a claim to being the highest town in the Alps, the town flourished.
The sanatoria have since been converted into high-end hotels, but the disease has left one indelible mark on the town. Homes in Davos do not have the gabled-roofs of postcard Alpine villages; instead they are flat-topped — a design code, still enforced today, that allows snow to melt into a central cavity and provide clean water for sickly guests.
Property is more affordable than in Switzerland’s picturesque village resorts such as Verbier, St Moritz or Gstaad. “It’s a mid-market Swiss resort,” says Jeremy Rollason, head of Savills’ ski department. Mid-market in the Swiss Alps translates as over €10,000 for a square metre of prime property, according to Savills.
“There is strong domestic demand in Switzerland now,” says Rollason. “The Swiss have long regarded property as a liability, not an asset, but that has changed in the last five years: partly because of Lex Weber — they realise there is an opportunity to buy a supply-limited asset — and partly because there’s a negative interest rate [currently -0.75 per cent]. They’ve got to put their money somewhere,” he adds.
A two-bedroom apartment in a Belle Époque former hotel is on the market for SFr890,000 ($906,000) with Cimag.
A three-bedroom apartment at the Hard Rock Hotel — which includes on its staff a “vibe manager” — is on sale for SFr1.86m. Buyers can recoup some costs during the WEF through the hotel’s rental scheme. A seven-bedroom chalet, in the hills overlooking Davos, is on the market for SFr4.7m with Engel & Völkers. Although it is a pricey option, renting it to a flush set of dignitaries for one week in January should more than cover annual costs.
Apart from one week of the year, Davos is a quiet Alpine resort writes Martin Wolf. During the World Economic Forum’s annual meeting, it is the centre of the economic world, heaving with the powerful, rich and both powerful and rich.
This makes for a degree of equality in (very mild) discomfort that is salutary for these visitors. Only political leaders receive preferential treatment, partly for security reasons. Otherwise, all these rich and powerful people have to queue, sometimes in the cold, to enter the venues, because the other people in the queue are as rich and powerful as they are.
It is also quite often far quicker to walk than sit in a limousine. Distances within this small town are quite short, the air is fresh and the snow is crunchy under foot. This makes walking a pleasure. But one must be careful: paths can get icy, making it easy to slip, fall and break something.
For some years, I have stayed, with other invited experts, in the Club Hotel, near the Davos Platz station. It is a clean, well-run three-star hotel without frills, but functional, and just a 20-minute walk to the Congress Centre, where most of the events take place. When the traffic is not too bad, one can also take a town bus or a WEF shuttle.
This is Switzerland: everything works. But the place is too full and there is always too much going on. This will be my 20th WEF annual meeting in Davos. It will be stimulating, no doubt, but I know I will be quite happy to leave.
- For foreigners, buying a Swiss holiday home is complicated. Purchases can only be made in designated holiday resorts, and individual cantons may set their own restrictions
- Available stock is also limited by the Lex Weber, which came into force in 2016. This caps the number of second homes in a given commune to 20 per cent of total accommodation
- This year’s theme for the WEF is “Creating a Shared Future in a Fractured World”. The conference runs from January 22-25
What you can buy for . . .
£400,000 A one-bedroom apartment on the outskirts of Davos
£1.5m A four-bedroom penthouse in Davos Platz
£2.8m A three-bedroom apartment in the town centre
More homes at propertylistings.ft.com
George Hammond was a guest of The Residences at Hard Rock Hotel in Davos
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