Ski resorts with communities
The people go to Aspen in the US because it has that community feel, and that’s what we find in the well-known ski resorts in Europe, people want to be in the mature resorts. You can buy property more affordably in lesser-known French ski resorts, but people more and more want to be part of a resort which has a community (often all-year-round life), an infrastructure, and where they can go, for example, shopping at the luxury end of the market.
The millennial appeal and who buys a chalet or ski apartment?
The other angle that ski property buyers often look at, is the investment angle, and you’re seeing more and more people looking at other factors that a given resort offers. One thing is the millennial appeal, looking at what this resort will cater for. For example, a millennial favourite, the shorter trips, is the ski resort close to main transport hubs? If investors are looking at it from an investment point of view, they’re going to be looking at wanting to get the best rental returns, and often that broader appeal is one of the factors that they’re keen on getting right.
Increasingly, it’s the reserve of the wealthy. Being an international company, Findhomeabroad likes to think that we are, if you like, the sun-seeking of that property sector. We deal with not just the top end, but the lower end and the middle market as well, but increasingly we’re seeing that the money, the cash chasing these investments are actually very wealthy. Whereas ten years ago, we were selling investment properties for half a million to a million, and people were funding this with mortgages, increasingly we’re seeing people with cash, typically between 5 and 15 million Euros, wanting to buy these ski assets. They may or may not borrow, but they don’t necessarily need to.
The snowfall test for ski property investment
That is having a look at different factors and it helps us have a look at how different resorts are doing. We look at things like temperature, snowfall, the resort altitude and season length, and we combine all of these factors together and it gives us results of where the most resilient ski resorts are. Avoriaz is the French ski resort with most snowfall (9 metres), followed by La Rosiere, Tignes and Val Thorens.
ROI for ski properties and rental platforms
Whenever prices get pushed to much higher levels, you then have the question for ski property investors which is: can you get a decent return on investment?
It is really all about demand and most importantly, it is the “usability” typified by a selection of facilities like Spa or concierge / personalised services. Also, a stat that really changes the real estate income potential output for ski properties is that last season 80% of owners rented out their ski property when it was under 50% a few years ago. This is also probably due to the rental platforms like Airbnb that are now present in ski resorts.
Other important fixtures: being close to a major airport, the summer season and the facilities on offer
Being close to a major airport (best one being Geneva in the Alps), certainly helps short lets and frequency of these paid stays in your ski property, therefore, increases the potential ROI. There’s also the summer season that we haven’t mentioned, and that’s becoming increasingly important. It’s obvious hedging of bets if you’ve got climate change you want to buy somewhere that you can actually use all year round and that’s a popular and pleasant place to go on holiday all year round. You’re really seeing ski resorts embrace this (examples are Chatel and Courchevel 1650 who have created lots of summer activities to attract more business through huge Spa centres with the Aquamotion in Courchevel costing a few tens of millions, see our investment apartments at Ecrin Blanc which give you private access also), there are a lot of good examples around the world where they already do this, and you’re seeing that more and more in the Alps. Mind you, an interesting point when you compare ski properties to beach or seafront properties in Europe, the first ones tend to offer longer rental potential if you add the 2 months of summer to the 5 months+ of winter…Not many sea locations in Europe that offer 7 months of rental potential…
The other thing is the wellness trend, and that is a trend that we’re seeing worldwide, driven by millennials but embraced by everyone. You’re seeing the rise of resorts with spas, yoga and ski holidays, a changing cuisine, a rise of vegan menus, that sort of things come through. See our developments with facilities in ski resorts.
This last fixture (Spa and swimming pool facilities) is linked to the new approach we see in worldwide real estate where it is more about usability nowadays than just owning a property. Gone are the days when people would just rent a plain property for a week or two… now guests want to rent facilities not just four walls and it can be for 2-3 days instead of longer-term for the same amount of money. Less time but more usability.
Linking different ski areas as one ski domain
The evolution of the infrastructure investment that has taken place across the Alps over the last decade. The Swiss have been particularly slow (the French have been quicker to adapt), and are now catching up. They are having to do this in order to survive, in order to compete, in order to attract a younger audience, that these ski resorts, to maintain their relevance in this changing world, and where we’ve seen the actual overall global ski market actually diminish during the financial crisis, it’s just the last twelve months actually increased for the first time since we came out of the financial crisis. A perfect example is Alpe d’Huez linking up with Les 2 Alpes to create a huge new ski area.
Major luxury hotel brands enter ski resorts but also Michelin restaurants and music festivals.
For example in Verbier, The W Hotel opened four years ago, Starwood owned branded residence and high-end 5-star hotel, and that has really created waves in Verbier. It was already a cosmopolitan resort, but it’s now even more cosmopolitan, and what it does is then it attracts other high-end retailers into the resort. A similar effect in Megève, where you’ve had the Four Seasons hotel recently open, and I would expect to see a domino effect where other people move in and other restaurateurs or retailers feel that it’s their time. We have many developers and, say, global hotel brands looking to invest in the Alps right now.
We have also seen the arrival of Michelin-starred restaurants to attract the foodie, high-end clientele into ski resorts. Music festivals like the Tomorrow Land in Alpe d’Huez give the resort a reputation as a younger millennial resort that people want to go to if they’re looking for that apres ski and after part
China and the next huge ski property revolution
The next Winter Olympics will take place in Beijing and the surrounding province in 2022. Currently, there are just 12.9 million Chinese skiers, but the Chinese have the vision to create 300 million new skiers or snow sport aficionados by 2022. Just to put that into perspective, there are today in the world only 120 million skiers…