Europe -  Zurich, Switzerland

Zürich is Switzerland’s largest city and is regarded as a leading global city and among the world’s largest financial centres. It is a hub for railways, roads and air traffic; its airport and railway station are the largest and busiest in the country and are easily accessible from the main areas of the city. The city is home to Switzerland’s major banks and insurance groups as well as some international companies and renowned research institutions (ETH – Swiss Federal Institute of Technology).

Zürich’s demand is primarily business driven due to the large presence of banks and international companies as well as the sizeable airport operation. However, its location on the lake, its Old Town, high-end shopping and considerable cultural attractions also make the city appealing to the leisure market. The conference market on the other hand is smaller, mostly due to the lack of a large convention centre; conferences and meetings are held in hotels or other venues and are therefore smaller in size. Zürich has historically had a very high price level; however, with the strengthening of the Swiss franc, hotels have become even more expensive for the international market (especially the Eurozone). The city’s hotel market has continued to see occupancies in the mid 70s, which has been the case since 2014; however, the market has recorded two consecutive years of average rate declines. 2017 recorded a RevPAR decrease of close to 4% in euro and 1% in local currency. Zürich is welcoming increasing numbers of leisure groups who choose the city as their base to explore Switzerland. While this segment might drive occupancy, it usually leads to a lower average rate.  

In terms of supply, the city has a substantial pipeline given its size (16% of current supply). A mixed-use project at the airport (The Circle) will welcome the arrival of two Hyatt hotels (550 rooms) and the IntercityHotel (260 rooms). The budget sector will continue to see additions to the market with a Meininger hostel/hotel hybrid property (170 rooms) that is expected to open in late 2019.

All in all, Zürich recorded a 1.5% increase in hotel values (local currency terms), reflecting the result of new supply putting pressure on rates. However, the market remains firmly in investors’ sights providing they are not deterred by the extremely high barriers to entry and the premiums that they carry will generate. The destination is dominated by family-operated businesses with a relatively illiquid transaction market, with no notable transactions in 2017.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Zurich RevPAR Change (€Euro)

Zurich RevPAR (€Euro)

For more information, please contact:

Sophie Perret, MRICS, MBA
sperret@hvs.com
  • +44 20 7878 7722 (w)
Simon Hulten
shulten@hvs.com
  • +44 020 7878-7775 (w)