• Goosing the golden egg

When Aesop told the story of the goose that laid the golden egg, he was warning investors to beware of short-sighted actions that could damage the profitability of an asset. In the case of the goose, its owners, greedy for more gold than a mere egg per day, killed it to see what was inside, hoping for more gold. Sadly, it was just goose innards.
In the case of the InterContinental Davos, the story is less of an investor bored with the drip, drip, drip of gold and more a cautionary tale of putting all your eggs in one basket. The hotel – nicknamed the Golden Egg because it looks like a golden egg – opened in December 2013 with the intention of scooping up the cash of World Economic Forum attendees. Davos, somewhat unbelievably, has a shortage of five-star hotel rooms.
Having the likes of Bono and Tony Blair swanning around the bar wasn’t enough to encourage guests in the 361 days of the year the WEF isn’t on and operator Stilli Park AG has since gone bust, leaving debts of CHF4.2m (USD4.8m). There is now a new operator, Weriwald AG, but a new challenge as this year’s WEF kicked off, in the form of the Swiss Franc – to use economic parlance – storming ahead after Switzerland ditched its currency ceiling against the Euro.
With values up 14% following the move, five-star rates may start to look even more peaky. A check on Airbnb by this correspondent found rooms in Davos for the WEF at GBP158 per night. As yet, the InterCon Davos can take solace that the sharing platform is not currently a huge threat. According to a report from Barclays – Hotels: Is Airbnb a game-changer? – Airbnb’s current bookings are about 37 million room-nights per year, around 20% of IHG’s 177 million last year. However, by the end of 2016, Airbnb is forecast to reach 129 million room-nights per year.
Although the bank says that just 10% of Airbnb bookings are for business use, if the Swiss Franc stays buoyant, next year’s WEF could change all that. With Airbnb’s métier filling unused rooms, the Golden Egg might want to get in touch for those times Tony Blair is off curing the Middle East.

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