Serviced Apartments Rise as a Strategic Segment in the Alpine Property Market

Holiday homes in the Swiss Alps are becoming harder to find and increasingly expensive. According to the UBS Alpine Property Focus 2025, prices for second homes in the region have climbed nearly 30 percent since 2020. The most sought-after destinations have recorded price growth of nearly 35 percent over the same period. Supply has been constrained by regulation and by long holding periods among owners. As a result, serviced apartments have developed into a credible alternative for investors, developers and mountain resorts that are navigating a restricted market.

Regulation as the Defining Market Force

The Second Home Act, introduced after the 2012 referendum, is a defining element of the current market structure. It limits the construction of new second homes in municipalities where such homes already represent more than 20 percent of the total housing stock. Many Alpine destinations have reached this limit. Once the threshold is crossed, classic second homes can be authorised only in exceptional cases. This policy was designed to curb the spread of underused holiday properties and to stabilise local communities. In practice, it has created a scarcity of new supply and has directed capital towards permitted categories such as hotel-linked apartments and serviced residences.

Andermatt as a Catalyst for a New Model

The shift became visible in Andermatt, where the Egyptian businessman and resort developer Samih Sawiris introduced a model that linked real estate sales to tourism operations. Sawiris, known for Orascom Development and several resort projects in Europe and the Middle East, relied on a structure in which owners buy furnished apartments but agree to place them in a professionally managed rental pool. Today, Andermatt Swiss Alps reports 775 completed apartments and residences, with 791 units sold when those under construction are included. A substantial portion of these units operate as serviced apartments that are managed as part of a hotel ecosystem. The model has since been adopted in Laax, Davos, Grimentz, Lenzerheide and in the redevelopment of San Bernardino.

Price Growth Reinforces the Shift

Market conditions have underpinned the spread of serviced apartments. UBS notes that holiday home prices in leading Swiss destinations rose by almost 3 percent in 2024 alone. Since the start of the pandemic, average prices in top resorts have increased by more than a third. At the upper end, St. Moritz remains the benchmark with average prices for high-quality apartments at about CHF 22’300 per square metre. Verbier, Zermatt, Gstaad and Andermatt follow closely. Across Alpine regions, only 1 to 2 percent of the housing stock is typically for sale at any given moment. Limited availability, strong demand and regulatory constraints have pushed buyers towards managed formats that remain permissible.

Tourism Demand Supports Operating Models

Tourism data confirm the continued appeal of the Alps. Federal statistics show that the 2024 to 2025 winter season recorded 18.5 million overnight stays, the highest figure ever for a Swiss winter season. Demand from domestic and international guests has remained solid, even as accommodation costs have risen. This provides a basis for the operating side of serviced apartments, which depend on occupancy and nightly rates rather than purely on capital appreciation.

How Serviced Apartments Are Structured

Serviced apartments occupy a position between residential property and hospitality. Buyers acquire a furnished unit with contractual access to hotel infrastructure. In return, they accept limits on personal use and commit the apartment to rental for most of the year. Usage rules vary widely. In some developments, owners may use the apartment for four weeks annually, with only two weeks allowed during high season. In other resorts, the obligation is to release the unit for a fixed number of peak weeks. In Davos, the branded residences linked to the Hard Rock Hotel allow up to eight weeks of personal use each year, with a share allocated to peak periods.

These rules determine rental capacity and economic viability. Marketed net yields generally range from 2.5 to 3.5 percent after operating costs. Actual outcomes depend on occupancy levels, pricing power, maintenance expenses and the fees charged by the operator. The wider hospitality sector still exhibits significant unused capacity. Switzerland Tourism reports that average annual hotel occupancy remains below 45 percent. The sustainability of serviced apartment concepts therefore depends on their ability to attract guests beyond peak season. Resorts with altitude advantages and strong branding tend to perform better. International comparisons of snow reliability regularly place Zermatt among the most resilient destinations.

Financing and Development Incentives

The model aligns the interests of developers, hotel operators and municipalities. Hotels can finance renovations or expansions by selling a portion of their inventory to private owners while retaining operational control. Municipalities increase lodging capacity without the political resistance associated with dark second homes. Developers gain access to a sales channel for projects that would not qualify as unrestricted second homes under current law.
Examples illustrate the reach of the model. In Grimentz, six multi-storey chalets with nearly sixty apartments are under construction, with about half already sold. In Lenzerheide, roughly one third of units in a new resort were placed within the first year of marketing, largely to buyers from the greater Zurich region. The San Bernardino redevelopment introduces 55 serviced apartments across three buildings, part of a broader effort to revitalise the region.

Risks and Data Gaps Remain

The structure carries risks. Owners depend on the operator’s performance and on the long-term attractiveness of the resort. Contractual obligations can affect resale conditions and liquidity. Serviced apartments may not appreciate in value in the same way as unrestricted second homes because use rights and rental obligations can limit the buyer pool. Financing conditions may differ from those of conventional residential mortgages and can require higher equity stakes.
There are also gaps in market data. While yield expectations are widely publicised, there is no comprehensive public dataset tracking actual operating performance across resorts. Information on resale prices is limited, and liquidity varies from project to project. These uncertainties require careful assessment of individual developments.

A Segment Likely to Grow Further

Despite the limitations, serviced apartments have become an established component of the Alpine property market. They respond to regulatory constraints and to the shortage of new supply in classic second homes. They meet the capital needs of hotels and the planning constraints of municipalities. UBS expects price growth in holiday homes to moderate, yet scarcity remains a core feature of Alpine real estate. Serviced apartments provide a managed form of participation in a restricted market at a time when new construction of free second homes is limited. Their expansion is likely to continue as long as regulation remains tight and tourism demand stays resilient.