Europe -  Geneva, Switzerland

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Geneva is the second most populous city in Switzerland (after Zürich) with a total population of around 200,000 (2017). The destination is widely regarded as a global city, mainly on account of the presence of numerous international organisations, including the headquarters of many UN agencies (ITC, WHO, UNHRC). The economy is focused on the service sector with a large number of financial institutions, private banks in particular. The city is also considered to be a hub for the watch-making industry with numerous luxury brands headquartered there and is home to major international research and development laboratories.

While Geneva benefits from relatively stable business demand throughout the week, the hotel market suffers from its inability to capture the leisure segment during weekends and holidays, which explains the historical marketwide average occupancy in the mid-60s. Nevertheless, the market has witnessed a slight increase in volume over the last two years, as the total number of arrivals to the city increased by 5% in 2017 and another 3% in 2018, coupled with minimal increases in supply.

Although average rate continues to decrease as a result of the currency dynamics making the country more expensive for foreigners, Geneva’s hotel market still achieves one of the highest average rates in Europe. The decision to lift the peg on the Swiss franc to the euro in January 2015 has put more pressure on hoteliers who were forced to decrease prices.

Hotel supply for the city and Canton of Geneva has remained stable in recent years, with minor variations related to the reorganisation of some hotel’s inventories and renovation works. At the end of 2018, the city of Geneva had 85 hotels providing some 6,400 rooms, which is quite substantial given the small size of the city. The market is geared towards the upper-end of the spectrum with four- and five-star hotels accounting for more than 55% of the total room inventory.

Over the next three years, the city is expected to welcome new economy lifestyle concepts with brands such as citizenM, Meininger and Yotel scheduled to enter the market. In addition, we note the 250-room Radisson Blu which will be strategically located between the city centre and the airport. At the luxury end of the sector, the Hotel Metropole and the Richemond have not yet been re-flagged, although interest among hotel operators continues to be strong. In terms of transactions, Geneva’s hotel market is rather illiquid, mostly due to a lack of sellers, with very few sales taking place in recent years. Overall, Geneva recorded a 3.5% decrease in hotel values in 2018 (although a 0.3% increase in local currency).

The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide. Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the hospitality investment market.

In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.

Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide insights on the likely trajectory of decline and recovery for hotel values.

For the Latest Information and Analysis on the Impact of COVID-19Click Here

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For more information, please contact:

Sophie Perret, MRICS, MBA
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Magali Castells
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