Geneva, Switzerland Undergoing Renovation

The Geneva hotel market is fundamentally prosperous and Rooms Supply Rooms supply in stable. Commercial demand in the city is driven mainly by the Geneva has been fairly stable over the last few many international and government organisations and by 8,000 banking institutions in and around Geneva. 2,782 2,629 years. Various hotels, 6,000 2,712 2,717 Leisure demand is strong in the especially the somewhat 4,000 2,088 2,415 Main Feeder Markets winter months, as European 2,327 2,469 dated, but iconic, luxury 2,000 1,751 1,905 tourists travel through Geneva to 1,159 1,666 hotels, have recently 1,429 1,163 965 France USA 621 Germany 0 11% 7% go skiing in the Swiss and French undertaken renovation 5% Italy 2000 2003 2005 2007 UK 4% 11% Alps. In summer, Geneva is and expansion 1- and 2-star 3-star 4-star 5-star Spain frequented by mostly Middle programmes. Domestic 4% Source: Canton of Geneva Statistics Office 23% Gulf States Eastern clients, as they consider 3% Japan the city a shopping haven. The Four Seasons Hotel des Bergues, the Mandarin Oriental 3% and the Grand Hotel Kempinski are all undertaking renovation Other Geneva registered around 1.3 29% million arrivals in 2008, with and expansion projects; the work includes guest room Source: Canton of Geneva Statistics Office expansion and new restaurant and spa concepts. around 77% of them coming from abroad. The Geneva hotel market owes much of its stability to the very Upscale Hotel Performance Average daily rate (ADR) high barriers to entry: these have essentially prevented new has increased by an supply from entering the market. Stability is also conferred by average of 7.0% a year resilient levels of demand generated by international and SFr 450 70% 400 68% and revenue per government organisations. These factors helped hedge the city 350 66% available room (RevPAR) against a slowdown in 2008, but hotels in Geneva saw their 300 by 9% a year since 2005, performance decline in the first quarter of 2009. The most recent 250 64% 200 indicating the strong transaction in the market was that of a 50% stake in the Four 62% 150 60% levels of demand in Seasons Hotel des Bergues that was sold in March 2009. 100

58% recent years. The dip in Hotel Transactions Market Snapshot 50 occupancy in 2006 Sale Price Price/Room 0 56% 2005 2006 2007 2008 reflects the partial Property Sale Date Rooms (SFr) (SFr) Source: HVS ADR (SFr) RevPAR Occ closure of certain hotels Le Richemond Hotel Jul-04 98 100,700,000 1,028,000 Hotel des Bergues * Apr-05 103 Undisclosed Undisclosed Geneva, Switzerland undergoing renovation. In the first quarter of 2009, occupancy Nash Rex ** Dec-07 70 28,200,000 403,000 declined by more than 10%, although rate remained fairly stable. The upshot of this was a decline in RevPAR of slightly * 50% stake ** Now NH Rex Hotel less then 10%. Geneva first felt the impact of the economic Source: HVS Research June 2009 downturn in November 2008, when occupancy dropped sharply and ADR declined too.

Hotels by Category Hotel values per room hit a record high in Value per Room There are currently some 93 hotels in 2008 of around SFr723,000: an increase of Five-star; 750 23% Geneva, providing a total of 6,400 guest 17% on the figure recorded in 2007. The 12% rooms and 10,400 beds. Geneva has a 700 18% 650 13% increase was driven mainly by an increase Other; 41% well-balanced profile in terms of 600 8% in RevPAR of 16%. Geneva ranks third in product offering by category, with the 550 3% terms of value per room, behind London Four-star; luxury market more pronounced than 500 -2% and Paris. Geneva is considered to be a 19% it is in other cities. The luxury hotels 450 -7% highly rewarding hotel market in which Three-star; line the city’s Quai, on the shores of 400 -12% to invest, based on risk-adjusted capital 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 21% Lake Geneva. The Geneva hotel market appreciation from 1998 to 2008, ranking accommodated around 2.9 million Source: HVS Hotel Valuation Index Value per Room (SFr 000s) Change (%) third behind Zürich and Vienna. Source: Office fédéral de la statistique overnights in 2008. For the full market report please contact Gabi Baumann. Email: [email protected]. Tel. +44 (0) 20 7878 7761 or Mara Eisenbaum. Email: [email protected]. Tel. +44 (0) 20 7878 7759 – HVS London Office www.hvs.com