Saas Fee is known as the 'Pearl of the Alps', because of its position nestled beneath mountain peaks reaching to over 4,000M, including the highest mountain (Dom) completely on Swiss soil. This is a particularly good opportunity in the car-free resort with the best snow record in the Alps! (This is very relevant and important for the future given the effects of global warming on resorts that are located at lower altitude.) It also has over 300 days sunshine a year, making it a wonderful all year-round destination. In the last few years, a number of international investors have started to invest considerable sums in hotels, apartments and the cable car company - so there is a general feeling of optimism for the future of Saas Fee, especially when compared to lower altitude resorts.
Saas Fee is going to be even more desirable in future years because of that snow record and the fact that there simply isn't very much space in the village to expand the hotel accommodation to any significant extent. Interestingly, these factors and a brilliant piece of marketing of the Winter-Ski-Pass / Magic Pass have led to current trade well in excess of the winter seasons two or three years ago. The presence of the other international investors, including in the last few months a Swedish investor who has bought several old hotels with a view to converting them to apartments and building new blocks. This will make hotel rooms even more valuable.
A new development of the ski area has been announced for completion in three to five years. This will involve a new lift from Mittelallalin (3,500M) to Feechoph (3,888M) where a new restaurant will be built. From that new high point views of the Matterhorn will be possible as well as off-piste skiing down to the Zermatt area as well as skiing back down to Saas Fee via Langfluh.
The Europa offers a wide range of accommodation to suit a range of visitors. It also enjoys a very loyal base of professional ski-teams that use the hotel during their summer training sessions on the glacier at Mittelallalin, which affords many kilometres of skiing and freestyle snowboarding.
There are some good opportunities to enhance revenue of the hotel by developing facilities and products and therefore increase revenues from their existing clientele as well as new customers. For instance:-
- developing currently under-used spaces and then offering conference / seminars to business customers away from the cities
- developing a further bar for non- residents
- expanding visitor numbers from the Far East / Asian communities ( Switzerland is the top destination for Indian honeymooning couples, and Saas Fee does not have its fair share of that!)
- entering into cooperation with hoteliers in one of the major Swiss cities to offer a combination of 'city' and Alpine breaks - a sort of best of both worlds for both winter and summer
- improved marketing generally and specifically to the China / Asian markets.
Please note that the current owner would be willing to enter into a service contract to manage the hotel as required by an investor for a transitional period. This is potentially very important to provide continuity to a large number of returning guests.
A summary of facilities in The Europa is:-
Rooms :- Double 49 Single 4 Suites/Family Rooms 1
Wellness Centre (Sauna/Whirl- Pool,/Jacuzzi/Massage) Yes & fitness room
Restaurants X 2 – 80 seats available in each
Bar + Carnotzet
Lounge + Terrace
Space for other developments
Regular refurbishment program of rooms, dining, bar areas.
Financials can be made available on signing an NDA. In overall terms the annual revenues are in the region CHF 1.5 to 2.0M and operating profits c. 22-25%. The target price for the hotel is CHF9M (Gross)/ c.CHF5.2M(net on a cash/debt free basis). Valuations are driven by various market and Saas Fee specific factors as noted above, including the cost of market entry, and not just earnings potential. To set up hotel facilities of c50 rooms of this quality would be well above the asking price, even if one was able to obtain the land and then get permission within Saas Fee to do it. (Please note that the price is based on a cash free / debt free basis, so therefore if you are able to assume the current loans, the payment to the owners would be reduced by over CHF3M)
In summary – excellent opportunity with great potential for good returns in the medium term. As noted above the belief that property prices are set to rise substantially in the next three to five years. This is supported by the resort being ‘high’ and therefore has a long-term future compared to others, a village that cannot accommodate endless expansion, new developments to expand the ski-area, plus the fact that compared to certain other opportunities Saas Fee is an undiscovered gem!