Luxury apartment instead of hotel rooms: a danger for the Lucerne hotel industry?
Business travelers are increasingly staying in so-called business apartments in Lucerne. Critics fear that this trend generally leads to higher rental rates.
Tourists increasingly book private apartments through online portals such as Airbnb. The same phenomenon is also evident with business travelers: they prefer to book so-called «business apartments» instead of classic hotel rooms. As the clientele is typically solvent, the apartments usually have a high standard.
Luxury apartment instead of hotel room
The city of Lucerne is increasingly becoming an interesting market for providers of such apartments. With the Zurich based company Le Bijou, another provider recently joined with a total of three apartments on Löwenstrasse and St.-Leodegar-Strasse. These are equipped with a kind of digital butler. An app can be used to order a private chauffeur, a cook for a private dinner or a nanny. Cleaning and laundry services are also offered. Apart from Lucerne, Le Bijou also runs luxury apartments in Zurich, Basel, Bern, and Zug.
In Lucerne, many Asians are among the customers
The company was founded by Madeleine Fallegger, Alexander Hübner, and Renato Steiner. The idea came to the entrepreneurs when they were traveling. During this time, they have rented their own apartments. Who are the customers who take advantage of such offers? In Lucerne, noticeably many Asians would come, says Madeleine Fallegger. «Otherwise our audience is well mixed. From business travelers to families.»
Luxury apartments like those of Le Bijou are no longer a rarity in Switzerland. However, for Lucerne city councilor Mario Stübi, the trend poses a threat to the hotel industry. For this reason, he submitted last year a query about business apartments. «Such apartments should actually be offered by hotels. But they overslept the trend», he says.
For the owners of Le Bijou, the current development is also a logical consequence – because the hotel industry is based on an outmoded model. «There was no internet before. You’ve been glad to have a restaurant in the hotel or a concierge who showed you the way», says Hübner. But not only the classic hotel industry would be pressed by such offers. Business apartments also occupied living space, which is then no longer available to locals.
Market price rises
«As furnished luxury apartments, the apartments can be offered at an exorbitant rental price», says Mario Stübi. This, in turn, has consequences for the general rental price level in the quarter: «If a homeowner wants to increase his rent, he can orient himself to the price of luxury apartments in this quarter. That drives up the rents for everyone», says Mario Stübi.
At Le Bijou, on the other hand, no one believes in a relation between business apartments and general rental prices: «We move in central locations where rents are relatively high and thus do not compete with the average person», says Alexander Hübner. In some cases, they would even receive requests from landlords who would be happy if Le Bijou rented their apartments for a longer period of time. «In Lucerne, for example, we took over a flat that had stood empty for almost two years», says Madeleine Fallegger.
In the city of Lucerne, business apartments make up about 0.5 percent of the housing supply. This is what the city council writes in its response to the mentioned query by Mario Stübi. The apartments are usually located in central locations.
A kind of hotspot for business apartments seems to be the Hofquartier around the Löwenplatz. In addition to Le Bijou, there are various other providers of business apartments active. The high-rise buildings on the Allmend also house several apartments for temporary business people. The prices are comparable to hotel rooms with appropriate size or amenities.
Le Bijou Sales Manager Madeleine Fallegger and CEO Alexander Hübner in a business apartment on St. Leodegar-Strasse 2 in Lucerne. | Photo: Pius Amrein (Lucerne, November 24, 2017)
Source: Luzerner Zeitung